The Rebels, second last in the 15-team competition and bottom of the Australian conference, have won only two of their eight matches as the season approaches the halfway mark.
Damien Hill, who took over from former Australia coach Rod Macqueen last year, would need to re-apply for his job at season's end, the team said.
"Damien has been advised of the board's decision that his current contract will not be automatically extended," Rebels CEO Steven Boland said.
Boland said he would also be leaving the club next month in a further blow to the flagging franchise, which was embarrassed by a punch-up between team mates during their South Africa tour.
Australia back Kurtley Beale, who was expected to help the Rebels push for a maiden berth in the play-offs this year, remains on the sidelines after being suspended indefinitely for his part in the team bus brawl.
Despite luring high-profile recruits including Beale, fellow Wallabies back James O'Connor and flanker Scott Higginbotham, the Rebels have failed to gel on the field and struggled to build a profile in a city dominated by the indigenous Australian Rules football code.
Saturday's fumbling home loss to the Southern Kings, letting the competition debutants back into the game with indiscipline and a litany of handling errors, placed further pressure on Hill.
The team have also lost full-back Richard Kingi for up to 12 weeks after he suffered a knee injury against the Kings.
The Rebels have a bye this week before taking on the Crusaders in Christchurch on April 28.
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