Bayern were left embarrassed on Saturday afternoon following a 5-1 defeat at the hands of Eintracht Frankfurt, which left the club in fourth spot.
As a result, the Bavarians have now decided to sack Kovac after a just one full season in charge, where he won the Bundesliga and DFB Pokal.
The statement read: "The performance of our team in recent weeks and the results have shown us that there was need for action.
"Uli Hoeness, Hasan Salihamidžic and I have had an open and serious conversation with Niko on this basis on Sunday, with the consensual result that Niko is no longer coach of FC Bayern.
"We all regret this development. I would like to thank Niko Kovac on behalf of FC Bayern for his work, especially for winning the Doubles last season. "