The Football Association said the termination of his appointment was by mutual consent.Gareth Southgate has been appointed as a temporary replacement.
Allardyce, 61, was accused of offering advice on how to “get around” rules on player transfers. He was also alleged to have used his role to negotiate a deal worth £400,000 to represent a Far East firm.
In a statement, the FA said: “Allardyce’s conduct, as reported today, was inappropriate of the England manager.
“He accepts he made a significant error of judgement and has apologised. However, due to the serious nature of his actions, The FA and Allardyce have mutually agreed to terminate his contract with immediate effect.”
“This is not a decision that was taken lightly but the FA’s priority is to protect the wider interests of the game and maintain the highest standards of conduct in football.
“The manager of the England men’s senior team is a position which must demonstrate strong leadership and show respect for the integrity of the game at all times.”