The Milan club sit ninth in Serie A having won just four of their opening 11 league matches.
Inter president Erick Thohir previously gave his backing to Mazzarri, but a 2-2 draw at home to Verona last Sunday proved to be his final game in charge.
A short statement released on Inter's official website on Friday read: "FC Internazionale announces that Walter Mazzarri has been relieved of his duties as first-team coach.
"The club would like to thank Mazzarri for the commitment, dedication and professionalism he showed over his 17 months in charge.
"Today's training session will be taken by Giuseppe Baresi."
Reports in Italy suggest Roberto Mancini will return for a second stint as Inter boss.
During his first spell at San Siro, Mancini led Inter to three straight Serie A titles between 2006 and 2008, while he also won the Coppa Italia twice.
Should Mancini return, his first game in charge could be the first Milan derby of the season on November 23.
Mazzarri replaced Andrea Stramaccioni in the Inter hotseat in May 2013, and led the club to a fifth-place finish - and a UEFA Europa League spot - in his first season at the helm.
Inter made several changes to their first-team squad in the close-season in a bid to challenge for UEFA Champions League qualification this time around, with the likes of Nemanja Vidic, Pablo Daniel Osvaldo and Yann M'Vila all arriving at San Siro.
However, former Napoli boss Mazzarri struggled to get the best out of Inter's new-look squad, and has paid the price with his job.
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