The Lilywhites have won just one league game since November and the club announced the 44-year-old had left his post on Wednesday morning.
Tuesday's 3-1 defeat at Yeovil leaves North End just five points above the relegation zone in npower League One.
A club statement said: "Preston North End Football Club can confirm that Graham Westley has left his position as manager.
"Graham oversaw a fundamental change in reducing the wage bill in line with the financial fair play criteria and brought together a whole new squad of players last summer.
"After an initially encouraging start to the season regrettably results have not been acceptable and the Board felt that a change of manager was the only way forward.
"Graham leaves with our thanks and best wishes for the future.
"An announcement regarding interim management arrangements will be made on Thursday, February 14."
- Sports & Recreation
- Graham Westley