Porter, who took charge in September 2012, has presided over a dismal season for the Astros.
Houston are are 59-79 heading into the final month of the MLB season and are all but eliminated from play-off contention.
Bench coach Dave Trembley has also been relieved of his duties, with Tom Lawless - who has previously worked within Houston's minor-league system - assuming the role of interim manager.
But despite their poor record, general manager Jeff Luhnow insists the decision was not motivated by performances this season.
"Bo's passion and energy are unparalleled, and his desire to win unquestioned," Luhnow said in a statement.
"This decision was not made because of our current level of competitiveness in the Major Leagues. I recognise that our win-loss record is largely a product of an organisational strategy for which I am responsible. Rather, I made this decision because I believe we need a new direction in our clubhouse.
"What we will seek going forward is a consistent and united message throughout the entire organisation.
"It is essential that as an organisation we create an atmosphere at the Major League level where our young players can come up and continue to develop and succeed.
"Ultimately, I am responsible for creating that culture, and I will do everything in my power to do so -- even when it means making difficult moves like the one we made today.
"Moving forward, I am optimistic about the direction of our team. Our young core continues to progress, and I believe wholeheartedly that our plan -- while at times challenging -- is working and will bring a consistent winner to Houston in the very near future.
"We wish Bo and his family well, and feel he will be successful in future endeavours."