CEO Stephen Bettis said the club, who hope to have a new manager in place before Wednesday's match against Liverpool, needed a "boost" in their battle for survival.
Sheffield United can confirm that football manager Paul Heckingbottom has been relieved of his duties.— Sheffield United (@SheffieldUnited) December 5, 2023
Additionally, coaches Stuart McCall and Mark Hudson, have also left the club.
Heckingbottom is the first manager to be fired this season in the English top flight after 11 defeats in 14 league games.
Former boss Chris Wilder was later on Tuesday announced as his replacement as manager at Bramall Lane.
Bettis praised Heckingbottom's "professionalism and dedication".
"However, after slipping to the bottom of the table and a number of disappointing results and performances, it is felt that a change is needed to give the club a boost and every possible chance of remaining in the Premier League beyond this season," he said.
Heckingbottom, appointed permanent manager in November 2021, guided the club back to the Premier League with a second-place Championship finish last season.
The 46-year-old voiced his frustration after his side's 5-0 defeat at Burnley at the weekend -- the club's third loss by five goals or more this season.
Some away fans turned on Heckingbottom towards the end of the match, during which striker Oli McBurnie was sent off before half-time for twice elbowing opponents.
"The biggest thing for me is the approach, of course we are in the Premier League and we totally understand the challenges ahead.— Sheffield United (@SheffieldUnited) December 5, 2023
My job is to lift the players, give them a bit more confidence and try find a way that makes us more competitive."
Chris Wilder on his remit. 🎙️ pic.twitter.com/CNR7I3anJ1
"The fans are right to shout, say that wasn't good enough. I was almost singing along with them at one point," Heckingbottom said.
He said the club were paying the price for a difficult summer transfer window, during which they lost star players Iliman Ndiaye and Sander Berge, the latter to Burnley.
"I wanted to keep the group together but we couldn't," he said. "We couldn't because of the last few years and the financial implications. If we'd tied them down (on longer contracts) then we probably wouldn't have sold those players.
"There wasn't a desire from the ownership to sell but a necessity from a business point of view. We've been making financial decisions rather than football decisions. Of course that affects me. I didn't want it to happen."
Despite the struggles of a number of clubs at the bottom of the Premier League, Heckingbottom is the first managerial departure this season — there were a record 14 managerial changes in the 2022/23 campaign.
Wilder, a popular figure at Bramall Lane, left by mutual consent in March 2021 after almost five years in charge. He has since had spells at Middlesbrough and Watford.