Luiz Felipe Scolari has been sacked as manager of Chelsea.
A statement on the club's Web site revealed the move had been made "to maintain a challenge for the trophies we are still competing for".
Chelsea are currently fourth in the Premier League and are seven points behind Manchester United. Scolari's assistant Ray Wilkins will take over temporarily while the club look for a successor to the Brazilian who won the World Cup in 2002.
Chelsea FC posted this statement on their Web site after the shock sacking.
"Luiz Felipe Scolari has been dismissed as manager of Chelsea Football Club with immediate effect," read the statement. "The Chelsea board would like to place on record our gratitude for his time as manager.
"Felipe has brought many positives to the club since he joined and we all feel a sense of sadness that our relationship has ended so soon.
"Unfortunately the results and performances of the team appeared to be deteriorating at a key time in the season.
"In order to maintain a challenge for the trophies we are still competing for we felt the only option was to make the change now.
"The search for a new manager has already started and we hope to have someone in place as soon as possible."
The news of Scolari's sacking comes within hours of Tony Adam's removal as manager of Portsmouth and it is probably this that prompted the Chelsea board to act so swiftly.
Ex-Chelsea manager Avram Grant was installed as the immediate favorite to take the hot seat at Fratton Park, but Grant has been in constant contact with Peter Kenyon and Roman Abrahmovich over the last few months and as Portsmouth sacked Adams Chelsea were forced to act.
Grant and Russian manager Guus Hiddink have been swiftly installed as favorites to take over at Chelsea as the club strive to put the brakes on a season that still has much to offer. It is believed that the duo would form a manager / technical director role, however Hiddink is unlikely to resign from Russia until they cannot qualify for the World Cup, and that a technical director role would allow him to double job.
Should this scenario come to be true it would seem that Frank Arnesen would also follow Scolari and leave the club. Relations between Arnesen and Abrahmovich have been strained for some time and he was expected to be sacked in the scouting cull last December.
Scolari's failed adaption to the daily grind of club management has been mooted as the main reason for his removal but the real reason is that Chelsea have failed to live up to their reputation under his guidance.
Constant comparisons with Jose Mourinho have not helped matters and these comparisons have reached a new high as the defence that was so miserly under Mourinho has now become an easy pushover under Scolari.
Scolari's cause has not been helped by injuries to key personnel like Carvalho, Terry, Cech, Essien and Deco, and also by the constant undermining by Didier Drogba.
Whoever takes over will have their work cut out but there is hope as Chelsea are still within touching distance of Manchester United and are in the knockout stages of the Champions League, where they will face ex-manager Claudio Ranieri's Juventus.