The 57-year-old only took over the Istanbul club after failing to get Italy out of the group stages of this year's World Cup, but has now been relieved of his duties after an underwhelming November.
Galatasaray have lost three of their four games in all competitions this month, and sit third in the Turkish Super Lig and rock bottom of their UEFA Champions League group.
They have collected just a point from five Champions League matches, and their 2-0 reverse at Anderlecht on Wednesday ended any hopes of qualifying for the Europa League.
Prandelli incurred the wrath of club vice-president Hamdi Yasaman after last Saturday's 3-0 home defeat to Trabzonspor, with the coach's decision to leave star player Wesley Sneijder on the bench met with public criticism.
And after increased speculation in Italy on Thursday, Galatasaray finally announced Prandelli's dismissal a day later with a brief statement on their official website.
"Team Technical Director Mr Cesare Prandelli's contract has been terminated," it read.