"Wolves announce that Stale Solbakken has left with immediate effect," the club said on their website (www.wolves.co.uk).
Solbakken's side are seventh from bottom of the Championship standings having won only three of their last 16 league games.
The Norwegian, who took charge in July, won 58 caps for his country between 1994-2000 and briefly played in the Premier League with Wimbledon in the late 1990s.
Solbakken retired from playing after suffering a heart attack in training in 2001.
He led FC Copenhagen to Danish league and cup titles during a five-year spell at the club and took them into the Champions League for the first time.
However, the Norwegian struggled at Cologne where he was sacked in April a few weeks before they were relegated from the Bundesliga. (Writing by Tony Jimenez; editing by Ken Ferris)