McDermott led Reading into the top-flight as Championship winners last season, but he has paid the price for failing to lift the Royals away from the bottom three.
A 2-1 home defeat against fellow strugglers Aston Villa on Saturday proved the final straw for Reading owner Anton Zingarevich and just 48 hours later the club released a statement confirming McDermott had been dismissed.
“Reading Football Club has announced today the departure of manager Brian McDermott,” a statement on the club’s website read.
“Owner Anton Zingarevich wishes to place on record his thanks to Brian who had achieved great success with the club since taking over as manager in December 2009.
“Brian gained promotion to the Premier League last year for only the second time in the club’s history thanks to a remarkable run at the end of last season. However, in our current situation, owner Anton Zingarevich felt that a change was necessary.
“The search for a successor will start immediately and it is hoped that a new manager will be in place as soon as possible to lead the fight against potential relegation.”
Whoever takes over at the Madejski Stadium will have to work quickly to save Reading, who are currently second bottom of the table with just five wins from their 29 league games this season.
With nine games remaining, they are four points from safety.
The Royals have lost their last five matches in all competitions and face Manchester United and Arsenal in their next two games.
Former Arsenal midfielder McDermott, 51, took over as Reading’s caretaker manager in 2009, after working at the club in several backroom roles since 2000, before being named full-time boss the following year.
It was his first significant managerial role and although he enjoyed success in the second tier, he was unable to make an impact among the English’s game elite.
His cause wasn’t helped by Reading’s refusal to spend big money in the transfer market.
Unlike bottom side QPR, who allowed manager Harry Redknapp to invest heavily in the January transfer window, McDermott was limited in what he could spend.
He signed Portuguese defender Daniel Carrico from Sporting Lisbon, but he has only featured once so far.
Fulham defender Stephen Kelly arrived for a nominal fee, along with Crawley midfielder Hope Akpan and Sheffield United striker Nick Blackman, but none of that trio made a significant impact under McDermott.
However, Reading striker Jason Roberts admitted he was sad to see McDermott leave.
“He’s a football man and a good man and I just think at this moment in time we take stock of what he has achieved and place on record our thanks,” Roberts told Sky Sports News.
Former Swindon boss Paolo Di Canio, ex-QPR manager Mark Hughes and former Charlton chief Alan Curbishley have all been linked as potential replacements for McDermott, but Roberts wouldn’t be drawn on who he wanted to get the job.
“It’s not a decision we are party to,” Roberts added. “All we can do is concentrate on what we do on the pitch and on the training ground and do our best for Reading – I don’t think anyone would say anything different.
“What we need to do is make sure we leave Reading in a good position, I think Brian McDermott has done that and I think we owe it to the club and owe it to Brian as much as anyone, to do the best we can.”