Carlo Ancelotti is sacked as Chelsea manager
Sir Alex Ferguson scoops LMA manager award
He was dismissed following the 1-0 loss to Everton, as the west Londoners finished second in the Premier League.
The 51-year-old had one more year left on his contract at Stamford Bridge.
A club statement read: "This season's performances have fallen short of expectations and the club feels the time is right to make this change ahead of next season's preparations."
The League Managers Association has named Manchester United boss Sir Alex Ferguson its manager of the year.
The award is based on a poll of bosses from England's four professional divisions, with the United boss also scooping an LMA Special Merit Award.
The merit award was for Ferguson having passed 2,000 matches as manager.
Carlo Cudicini extends Tottenham contract until 2012
'Team of decade' revealed
Tottenham goalkeeper Carlo Cudicini has signed a one-year contract extension, tying him to the club until 2012.
The 37-year-old, whose last deal was due to expire this summer, has been used as cover for Heurelho Gomes since joining from Chelsea in January 2009.
Van der Sar was a firm favourite in goal, with 53% of respondents choosing him ahead of Chelsea's Petr Cech (33%).
Ashley Cole convincingly secured the left-back spot, with 73% of the vote, ahead of Patrice Evra (27%). Neville took the right-back position with 60%.
John Terry received 40% of votes at centre-back, with Vidic joining him (27%). Rio Ferdinand was edged out after receiving 20%.
Giggs was an emphatic winner in the vote for the left side of midfield, with 87%. His former team-mate Ronaldo (67%) easily beat another Manchester United legend, David Beckham (27%), to the right-flank position. Beckham did not play for long in the Premier League at the start of the decade, having joined Real Madrid in 2003.
Liverpool captain Steven Gerrard (33%) is the only non-United player in midfield, partnering Scholes (23%) in the centre, meaning there was no place for Roy Keane (17%), Cesc Fabregas (10%) or Frank Lampard (10%).
In attack, Chelsea's Didier Drogba (23%) and former Newcastle star Alan Shearer (23%) were the joint favourites of the managers, seeing off competition from Thierry Henry (17%), Wayne Rooney (20%) and Dennis Bergkamp (10%).
Sir Alex Ferguson's 2007/8 Manchester United side were chosen as the outstanding team of the decade, ahead of Arsenal's 2003/4 'Invincibles' and Jose Mourinho's 2005/6 title winners.
The 2007/8 season, which saw United pip Chelsea to the title by two points, and Roy Hodgson's Fulham perform a miraculous escape from relegation, was rated as the most exciting campaign of the decade.
And lots of player movement...