A report says, the future of the 55-year-old Frenchman, who succeeded Ronald Koeman a year ago, had been circulating despite a reasonably successful season in which the Saints finished eighth in the Premier League and reached the EFL Cup final.
Reports last week said that Southampton’s director of football Les Reed was looking to replace Puel after finishing an end-of-season review for club chairman Ralph Krueger.
The news was broken in a club statement on Wednesday.
The report is quoted thus: "Southampton can today confirm that it has terminated the contract of Claude Puel with immediate effect.
"Everyone at Southampton would like to express our thanks to Claude for his hard work and commitment this year. We wish Claude well for the future.
"The search for a new management team is underway. We are confident that we will find the right fit in line with the long-term vision of the club."
Under Puel, who arrived from French club Nice, Southampton won just 12 Premier League games last season.