The successor is Quique Setien, a former coach of Real Betis. He will take charge of the club until June 2022.
Valverde, who had spent just two and half years at the Catalan club, is the first manager to be sacked by Barcelona mid-season since Louis van Gaal was dismissed in January 2003.
Barcelona are currently ahead of Real Madrid at the top of La Liga on goal difference and through to the knockout stages of the Champions League, but they lost 3-2 to Atletico Madrid in the semi-finals of the Spanish Super Cup on Thursday in Saudi Arabia.
The cup was won by their eternal rivals, Real Madrid.
Barcelona announced Valverde’s departure in a tweet Monday night: “Agreement between FC Barcelona and Ernesto Valverde to end his contract as manager of the first team. Thank you for everything, Ernesto. Best of luck in the future”.