The Rossoneri have had a miserable season and find themselves languishing in the bottom half of the Serie A table in genuine danger of being sucked into a relegation battle.
Allegri had avoided the axe before Christmas despite reported pressure from director Barbara Berlusconi to make a fresh start.
But 2014 saw a continuation of the poor form that had plagued the Diavolo throughout 2013 and Allegri's position was made untenable by a 4-3 loss to tiny Sassuolo - a result that Barbara Berlusconi labelled 'unacceptable'.
"AC Milan would like to communicate that they have relieved first team coach Allegri and his staff of their duties with immediate effect," a club statement reads.
"Milan would like to thank Allegri and his staff for the work they have done and wish them every professional success. The team will be provisionally put in the hands of Mauro Tassotti."
Allegri took the job in 2010 when Cagliari released him from his contract so that he could move to Milan. He delivered the title in 2010-11 but since then Juventus have taken charge in Italy and things have gone downhill for the 46-year-old.
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