A 6-2 defeat to Borussia Dortmund on Saturday proved to be the final straw for the under-fire boss.
With their European adventure seemingly set to come to an end at the last-16 stage, and with their league standing slipping, Leverkusen have decided to act now.
They have fallen to ninth place in the German top flight, five points adrift of the European spots and 11 behind the top four.
Leverkusen have suffered 11 defeats in 23 Bundesliga fixtures this season, the worst record of any side in the top half.
They have also conceded 38 times, with no side above them in the standings having been breached on more occasions.
Schmidt took charge of Leverkusen in 2014 after impressing during his time in charge of RB Salzburg. He led them to fourth place in the table in his first season at the club, before going one place better in 2015-16.