The video stirred outrage among college and professional players, fans and government officials, including New Jersey Governor Chris Christie, who called the dismissal "the right and necessary action to take in light of the conduct displayed" at the state's largest public university with 58,000 students.
The video went viral almost four months after Rutgers Athletic Director Tim Pernetti suspended Rice for three games. The suspension cost Rice $75,000 in fines and lost salary.
The firing marked an abrupt reversal for Rutgers, which had retained Rice as coach when the suspension ended and had ordered him to undergo anger-management therapy.
Robert Barchi, president of the university in New Brunswick, New Jersey, had supported Pernetti's decision to suspend Rice, but said on Wednesday that the video showed "a chronic and pervasive pattern of disturbing behaviour."
"Coach Rice cannot continue to serve effectively in a position that demands the highest levels of leadership, responsibility and public accountability," Barchi said.
Pernetti, in a statement, acknowledged that he should have gone further than suspending Rice in December.
"I thought it was in the best interest of everyone to rehabilitate, but I was wrong," Pernetti said. "Moving forward, I will work to regain the trust of the Rutgers community."
Rice, 44, apologised for his behaviour in an interview with WABC-TV on Wednesday outside his home in Little Silver, New Jersey.
"There's no explanation for what's on that film," he said. "There's no excuse for it. I was wrong. And I want to tell everybody who's believed in me that I'm deeply sorry for the pain and hardship that I've caused."
Rice's gay slurs came against the backdrop of the 2010 suicide of Rutgers student Tyler Clementi, 18, who jumped off the George Washington Bridge after learning that a room-mate spied on a homosexual tryst he was having.
The episode drew national attention when the room-mate who spied on Clementi with a computer-mounted webcam was prosecuted under a hate crimes law. The case also highlighted issues of bullying through social media and teen suicide.
Rice's antics were reminiscent of an incident in 1997 when Indiana basketball coach Bob Knight was caught on tape choking player Neil Reed in practice.
Reed spoke about the incident after the video circulated publicly in 2000 and Knight, known for his short temper and combative personality, was fired six months later.
- Politics & Government