The Saints, who drew with Manchester United in the Premier League on Saturday, are 18th in the table.
Southampton confirmed the move in a statement, adding: “The search for a new manager to take the club forward is already under way.”
First-team assistant coach Kelvin Davis will take charge of the team for the game against Tottenham on Wednesday.
BBC Sport understands Southampton are set to approach former RB Leipzig manager Ralph Hasenhuttl about the manager’s job. The 51-year-old Austrian has been out of work since leaving Leipzig in May.
Hughes, who also had a spell at the south coast club during his playing career, joined Southampton in March, two months after being sacked by Stoke City.
The club were one point above the relegation zone at the time and the 55-year-old led them to safety last season by securing two wins from their last four games.
However, they have struggled again this season and, across his spell, have won just three of their 22 league games.
Before the draw against Manchester United, Southampton were beaten 3-2 by relegation rivals Fulham and knocked out of the EFL Cup on penalties by Leicester.
Along with Hughes, assistant first-team manager Mark Bowen and coach Eddie Niedzwiecki have also left the club.