Coach Frankie Bunn and performance manager John Harbin have been placed in temporary charge of first-team affairs starting with tonight's game against Cardiff City.
Dowie had been at the Ricoh for 12 months with a record in 49 games in charge of won 20, lost 21 and drew 8.
Speaking to the Echo about Dowie's dismissal City boss Dave Jones said.
"I don't know what has gone on, but how long has Iain been there? It is a thing in football now which should not amaze anybody.
"I asked for patience, I see Kevin Keegan is asking for it now. Any manager who goes into a club, unless you are very, very lucky, can not turn it around in one fell swoop. You have to implement everything and sometimes that takes time.
"Sometimes you get an influx of quick results, but eventually it catches up with you because there is no quick fix, but everybody seems to think there is.
"It just seems at the moment that everybody runs out of patience with the manager, but if a team is not doing well there is always a reason.
"I've been here two-and-a-bit seasons now and I am the second longest serving manager in the division. It is absolutely crazy."