The departure of Bilic came after the 4-1 home defeat by Liverpool left West Ham third from bottom in the Premier League table.
Bilic returned as manager to the club he had represented as a player in the summer of 2015. He led West Ham to a seventh-place finish in his first season and 11th in 2016/17.
The club have confirmed that Bilic’s coaching assistants, Nikola Jurcevic, Edin Terzic, Julian Dicks and Miljenko Rak, have also left with immediate effect.
"We see this as an exciting opportunity to appoint a quality manager to the position to inject fresh ideas, organisation and enthusiasm into a very talented squad," David Sullivan and David Gold, the club's joint-chairmen, said in a statement on West Ham's official website.
Bilic is the fourth Premier League manager to depart this season after Frank De Boer (Crystal Palace), Craig Shakespeare (Leicester City) and Ronald Koeman (Everton).
West Ham are next in Premier League action on 19 November, at Watford.