Harry Redknapp was sacked as manager of Tottenham Hotspur on Thursday after nearly four years in charge of the Premier League club.
"This is not a decision the board and I have taken lightly," said Tottenham chairman Daniel Levy in a statement. "Harry arrived at the club at a time when his experience and approach was exactly what was needed.
"This decision in no way detracts from the excellent work Harry has done during his time with the club and I should like to thank him for his achievements and contribution."
Spurs were bottom of the Premier League table when Redknapp arrived at White Hart Lane from Portsmouth in 2008 and Levy added: "Harry will always be welcome at the Lane."
Redknapp, in a statement issued by Tottenham, said: "I have thoroughly enjoyed my time at Spurs and am proud of my achievements. I have had a fantastic four years with the club, at times the football has been breathtaking.
"I am sad to be leaving but wish to thank the players, staff and fans for their terrific support during my time there."
The 65-year-old Englishman was known to be pushing Levy for an extension to his contract, which was due to expire at the end of next season, saying the uncertainty surrounding his position was destabilising the squad.
It has been claimed that Levy was only willing to offer Redknapp a rolling 12-month contract whereas Redknapp favoured a longer deal.
Redknapp, whose status as the media and fans' favourite to become the next manager of England was ignored by the Football Association (FA) when they chose Roy Hodgson instead, did achieve Levy's goal of a top four Premier League finish last season.
But while that would normally have been good enough for Champions League football next season it wasn't this time because London rivals Chelsea won this term's edition and thereby qualified as European champions.
Tottenham were third and 10 points clear of north London rivals Arsenal when Capello resigned in protest at the FA's decision to strip John Terry of the England captaincy.
Has they stayed third, rather than been overtaken by Arsenal, Spurs would have qualified for the Champions League regardless of Chelsea's triumph.
Indeed, at the turn of the year, Spurs were being spoken of as potential title challengers.
But a run of one victory in nine matches -- a sequence understood to have caused Levy great concern -- contributed to them slipping to fourth.
Redknapp repeatedly denied the England speculation had had any effect on Tottenham's results.
Prior to the speculation surrounding the England job, Redknapp also had to deal with the stress of facing a tax trial relating to his time as Portsmouth manager. He was cleared by a jury of all charges.
Redknapp had become increasingly vocal in recent days in calling for a new Tottenham contract, saying without it Spurs risked losing star players such as Gareth Bale and Luka Modric.
"It's not a case of me looking for security," Redknapp told ESPN Soccernet.
"What it's about is players knowing you've only got one year left on your contract and knowing that it doesn't work, basically.
"You don't let players run into the last year of their contract if you think they're any good, and you don't let managers run into the last year of their contract if you think they're any good.
"It's up to Tottenham. If they think I'm okay and I've done a decent job and deserve an extension, they'll give it to me.
"If Daniel doesn't think I'm worth it, that's up to him, that's up to the club. There's nothing I can do about it."
Redknapp joined Tottenham from Portsmouth, where he'd just won the FA Cup, in 2008 with Spurs, who had been managed previously by Juande Ramos, rock bottom of the Premier League.
But he subsequently led them to the quarter-finals of the Champions League and two top four finishes in the Premier League.
Everton manager David Moyes, linked with the Tottenham job when Redknapp was being touted for the England post, remains the bookmakers' favourite now there is a vacancy.