Announcing his departure in a terse, two line statement, United thanked Moyes for "the hard work, honesty and integrity he brought to the role".
Veteran midfielder Ryan Giggs, 40, was appointed to take interim charge of the team for the final four games of the season, with United mired in seventh place and out of the running for a Champions League.
Manchester United's Scottish manager David Moyes is pictured during the English Premier League football match between Everton and Manchester United at Goodison Park in Liverpool. (AFP photo)
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Newspapers had earlier reported that Moyes would be sacked, trumpeting the 'End of an Error' after the American owners, the Glazer family, lost patience and decided the manager had to go in the wake of a tame 2-0 defeat at Moyes' former club Everton on Sunday.
Moyes, who turns 51 on Friday, was appointed on the recommendation of fellow-Scot Ferguson, who retired at the end of last season after 26 years in the job.
Speculation immediately turned to who might take over at Old Trafford, with Dutchman Louis van Gaal quickly installed as the bookmakers' favourite.
The former Barcelona, Ajax Amsterdam and Bayern Munich boss is coach of the Netherlands but has already said he will stand down after the World Cup in Brazil and has talked of a move to the Premier League.
Ferguson had steered United to the title last season for the 13th time and the club's 20th overall but the self-belief and confidence that had characterised his years in charge evaporated abruptly under Moyes.
Former United stalwart Gary Neville suggested Moyes should have been given more time to make his mark and said the fault was not his alone.
"The idea of giving people three and four and six year contracts and then getting rid of them after 10 months is something that is foreign to me," he told Sky television.
"However there is no disguising that the football this season has been poor, the results have been poor. As a fan, I've not enjoyed watching it. I'm sure David Moyes himself hasn't enjoyed watching it.
"I've played with a lot of those players, they love the club and are desperate to do well for the club but they've just completely lost confidence and belief. That's ultimately what's cost David Moyes"
Moyes's sudden departure evoked memories of the traumatic spell the Old Trafford club suffered between 1969 and 1971 when Matt Busby retired after 24 years as boss.
His hand-picked successor Wilf McGuinness only lasted 18 months before Busby took over the reins again.
A file picture shows Manchester United's Scottish manager David Moyes holding up a club shirt during a photocall at Old Trafford in Manchester. (AFP photo)
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It is highly improbable though Ferguson will swap his lucrative career as an after-dinner speaker and business consultant for a return to the dugout.
Moyes, who was previously in charge of Everton for 11 seasons without winning a trophy, was given a six-year contract by United, but they have lurched from one crisis to another.
A shockingly lame performance at Goodison Park on Sunday - which completed their first league double defeat to Everton in 44 years - was the final straw for the Glazers, with seventh-placed United failing to qualify for the Champions League for the first time since 1995-96.
The knives had already been out before then, with disgruntled fans paying for a plane trailing a banner over Old Trafford reading 'Wrong One - Moyes Out' in a game against Aston Villa in March.
United won that match 4-1, and most of the fans inside the ground applauded the manager, but the writing was on the wall even if he was reluctant to read it.
Fans of rival sides started to chant 'David Moyes, we want you to stay' and stewards stood guard to keep home supporters away from the prominent banner inside Old Trafford declaring the manager to be 'The Chosen One'.
At Everton last weekend, Moyes was taunted by one pitch-side fan posing as the Grim Reaper, complete with inflatable scythe and death mask.
Until last week the view was that Moyes would ride out the wreckage of this campaign and be given money to invest.
That will not now happen, with the owners clearly unwilling to trust the manager with the significant sums required to revamp the ageing side in the close season.
There was little hint of the trouble to come back in July.
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United won the Community Shield against FA Cup winners Wigan Athletic in Moyes' first match in charge at Wembley in August before they launched the defence of their league title with a 4-1 win at Swansea City.
The first alarm bells rang when they were crushed 4-1 at home by Manchester City on Sept. 22 and defeat in their next home game to West Bromwich Albion, who had not won at Old Trafford since 1978, left them 12th in the table.
It was United's worst start to a league season for a quarter-of-a-century.
Everton also won at Old Trafford for the first time in 21 years, Newcastle United won there for the first time in 41 years and Swansea for the first time ever when they triumphed in the third round of the FA Cup.
Not only were the results disappointing, so were the performances. The cautious approach that had made Everton a solid team punching above their weight was not what United fans demanded.
Moyes's first major signing, Belgian midfielder Marouane Fellaini, who followed the manager from Everton, looked ponderous and out of his depth as United failed to show attacking spark.
Rumours emerged of player dissatisfaction with Moyes' training regime, while his virtual ignoring of Giggs, worshipped at Old Trafford, further alienated the new manager.
The few bright sparks came in the Champions League but they were extinguished when United went out to holders Bayern Munich and United may now struggle to sign the elite players needed to take them back to the top.
When Ferguson left Old Trafford, he told the fans in a farewell speech "Your job now is to get behind our new manager". The search for another has started.