Everton have been able to pick only four points in the English Premier League (EPL) since March.
Martinez, who had three years remaining on his contract, led the club to the semi-finals of the FA Cup and Capital One Cup this season.
“Their poor league form, however, proved his undoing and he leaves after nearly three years at the club,” said Sky Sports news.
A “Martinez out” banner was visible at the Stadium of Light, even prior to kick-off, and has been seen in recent weeks at home matches.
Some fans held a protest against the Spaniard following the 2-1 victory over Bournemouth on April 30.
Another protest has been fixed outside St George’s Hall, where Everton will be holding their end-of-season awards dinner on Thursday.
The dismissed coach was appointed as David Moyes’ successor in June 2013, and guided Everton to their best Premier League points tally – 72 – and a fifth-place finish in his first season in charge.
Martinez smashed the club’s transfer record with the £28m signing of Romelu Lukaku from Chelsea in the summer of 2014, but failed to build on the success of his debut campaign at the club, finishing in 11th.
The 2015-16 season has been another disappointing campaign for Martinez and Everton, who have won only five times at Goodison Park.
Everton currently sit at 12th spot and, with only one match remaining, they are guaranteed to finish in the bottom half of the Premier League for a second successive year.
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