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 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.
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