In a statement, the club confirmed the news that they were parting ways with their controversial manager.
Sky Sports News understands that his assistant Michael Carrick will be appointed temporary manager to the end of the season.
Two Xherdan Shaqiri strikes in the second half gave Liverpool a commanding lead though, and United have now conceded more Premier League goals this season than in the whole of last term.
Liverpool's 3-1 win over its great rival on Sunday was confirmation of that - although it still needed two strokes of luck to underline the gulf that has quickly grown between English soccer's two grandest clubs.
United are now sixth in the table, 19 points behind their league-leading bitter rivals after a disappointing run of form.
Mourinho has paid the price for overseeing a woeful season at Old Trafford that has left United languishing in sixth place in the Premier League table.
The club would like to thank Jose for his work during his time at Manchester United and to wish him success in the future.
"I said last season that the next manager of Manchester United should be Mauricio Pochettino".
United need old De Gea back for visit to Liverpool
It's hard for people that can see to understand, but I think of it as normal to me and I have been like that all my life. That means we can play Bayern Munich, Borussia Dortmund , Juventus, Paris St Germain, Porto or Real Madrid .
According to British media reports, United will have to pay Mourinho £22.5 million (RM116.7 million) - as the club are still in the Champions League - to sever the ties.
However, they say former Real Madrid boss Zinedine Zidane is the frontrunner as it stands.
The club said the new manager will understand the philosophy of the club, including its attacking traditions.
"I know that we lost some other matches, but we played away at Liverpool, Chelsea and Manchester City away - probably the three best teams apart from Tottenham. We have played them twice and won once", said Dortmund's CEO Hans-Joachim Watzke. "We look at the badge, the history - some of these players aren't good enough for Manchester United".
August 27, 2018 - Defeat at Brighton in the second game of the season is followed up by a 3-0 loss at home to Tottenham - the worst home defeat of Mourinho's career.
United's display was further criticised by Neville and former Red Devils captain Roy Keane after the game.
"In the case of the coaches, when and at what moment do you see they are no longer in charge of directing a team or training?" the Porto custodian asked.