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Carvalhal guided Wednesday to the play-offs in his first two seasons at Hillsborough, but a miserable seven-match winless run has cost him his job.
The Portuguese coach’s exit came just hours after Wednesday chairman Dejphon Chansiri released a statement of support after fans chanted for Carvalhal’s dismissal in the wake of Saturday’s 2-1 home defeat to Middlesbrough.
Thai businessman Chansiri changed his tune less than 24 hours later, saying: “Both parties believe the time is right to go our separate ways.
“I would like to offer my sincere thanks to Carlos for the time, effort and commitment he has given Sheffield Wednesday over the last two and a half years.
“I maintain a huge amount of respect for Carlos as a coach and as a person and he will always be welcome at Hillsborough.
“I wish him every success in the future.”
Lee Bullen will take charge as caretaker boss for the game at Nottingham Forest on Tuesday as Wednesday start their search for a new boss.
Carvalhal arrived at Wednesday in 2015 after being out of the game for three years.
But he proved an astute selection as in his first season at the helm he took the Owls to within 90 minutes of a first Premier League return in 16 years, before they suffered a play-off final defeat to Hull.
He delivered a second successive play-off campaign last season, but that one ended in a semi-final defeat to Huddersfield.
Wednesday are currently languishing in 15th place, 11 points off the play-offs.
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