Bournemouth announce shock sacking of boss Gary O'Neil
O'Neil replaced Scott Parker at the end of August and led the team to a 15th place finish in the English top-flight.
Bournemouth owner Bill Foley said in a statement: "Gary's achievement last season is one I will always be grateful for.
"This has been a difficult decision, but it has been made with great consideration to best position ourselves ahead of the coming season."
The statement said the appointment of a new head coach will be announced imminently.
O'Neil initially replaced Parker on an interim basis following a 9-0 hammering at Liverpool before being appointed permanently in November.
The 40-year-old took 36 points from his 34 top-flight games in charge.
"We have also identified a number of significant targets in the transfer market this summer and believe this change in direction will provide us with the best platform from which to build," Foley said.
"Gary will go on to have a long career as a head coach or manager, but we feel that, at this moment in time, a change is in the best interests of this football club."