Steve McClaren has resigned as manager of Championship strugglers Nottingham Forest after 112 days in charge.
McClaren, 50, stepped down during a meeting with chairman Nigel Doughty that followed Sunday's 3-1 home defeat against Birmingham City.
Forest are currently fourth from bottom in the Championship, having collected eight points from 10 games.
The club has confirmed that Doughty, also the club's owner, will step down as chairman at the end of the season.
Forest said in an official statement that they would begin the search for a new manager and chairman immediately, and that McClaren had made it clear he would not be seeking any compensation.
"Part of the role of chairman is to accept responsibility for what happens at the club," said the statement.
"As such Mr Doughty accepts responsibility for his personal decision to recruit Steve McClaren as our manager in the close season. Given our very poor start to the season and Steve's resignation, Mr Doughty feels it is only right to do so."
The club statement also added that Doughty would continue to support the club financially once he stepped down after 10 years as chairman.
McClaren was reportedly unhappy about being unable to sign two players on loan.
"He was going to walk out anyway, I understand," said BBC Radio 5 live's Pat Murphy. "He'd hoped to go out on a high note after the game against Birmingham.
"He was upset at not being able to secure two Premier League players on loan terms. The chairman felt the wages would be too high."
McClaren had stated after the 5-1 midweek defeat at Burnley that dramatic changes needed to take place at the club.
"Something drastic has to be done because we can't carry on like this," he told BBC Radio Nottingham after the hammering at Turf Moor.
"It's a complete mess now at the City Ground. Steve McClaren will not take a penny from what was left of his contract, two-and-three-quarter years. Nottingham Forest are now looking for a manager and a chairman."
McClaren had sent his Forest players out early for the second half at Turf Moor and then sat alone in the dug-out while his players warmed up by themselves.
The day after that defeat, Forest confirmed that David Pleat had stood down from his part-time football consultant role.
Pleat was part of Forest's much-discussed and much-criticised transfer acquisitions panel after joining to help ex-boss Colin Calderwood in 2006.
The 66-year-old was involved in signing players until last year when his role at the City Ground became less formal.
McClaren had been appointed in the summer as successor to Billy Davies, who was sacked by the club after Forest failed to progress beyond the Championship play-off semi-finals for the second successive season.
He had been assistant coach at Derby and Manchester United before taking over at Middlesbrough in 2001, where he won the Carling Cup and reached the final of the Uefa Cup.
He succeeded Sven-Goran Eriksson as England coach in 2006 but after failing to guide them to the finals of Euro 2008, McClaren quit before going on to coach Dutch side FC Twente, taking them to a league title, and German team Wolfsburg before returning to England at Forest.
Before McClaren stood down, Everton captain Phil Neville, who played under him for England, told BBC Sports World Have Your Say: "I'm a massive fan of Steve McClaren and I thought this was going to be his big year of turning round his reputation in England.
"He got a great reputation abroad with FC Twente and Wolfsburg, and I thought this would get him over the England job. But he's gone into a difficult club.
"You saw the job that Billy Davies had there, when he was constantly at loggerheads with the chairman.
"He had a difficult job, and I think Steve's found it just as difficult. He's had promises that have not been fulfilled, and more importantly the run of results suggests the team aren't playing for him."
