Vazquez took the reins at Deportivo in February 2013, but failed to save the club from relegation to the Segunda Division at the end of that season.
In his first full campaign at the helm, Vazquez immediately guided the team back to the top flight.
However, he has been relieved of his duties after the board reportedly took issue with his recent comments regarding the club's transfer acquisitions.
The club released a statement on Tuesday, which read: "The council of administration for sports has decided to dispense with the services for Fernando Vazquez as first team coach.
"The lack of confidence of the board of directors in the coach has caused this decision to be made at this time.
"Without having started pre-season, it is still possible to generate the atmosphere of confidence necessary to develop the sport and business project that must allow us to be a competitive team at all levels in the first division.
"Despite the situation in the past few days, Deportivo La Coruna want to sincerely thank Fernando Vazquez for the work he has done at the club.
"From this moment, efforts will be focused on the search for a new technical manager for the first team in order for pre-season to start on July 14.
"In the coming days, the president of Deportivo La Coruna will publicly discuss the entire situation."