The team will now seek "a proven leader," said president Theo Epstein.
“Today, we made the very difficult decision to relieve Dale Sveum of his duties as Cubs manager," Epstein said in a statement.
"Dale has been a committed leader for this team the last two seasons, and I want to thank him for all of his dedication and hard work."
His termination comes 13 days after Epstein declined to give 49-year-old Sveum a vote of confidence. Sveum's future was part of the annual evaluation process in the organization, and Epstein said that he was not judged on wins and losses.
The Cubs lost 14 of their final 18 games and finished 66-96.
Epstein said he met with Sveum "over a couple of beers" Sunday night and delivered the news of the dismissal.
Sveum’s firing could pave the way for the Cubs to pursue New York Yankees manager Joe Girardi, a former Cubs catcher that remains popular in the Chicago area.
Epstein said the team will "need that spark of a winning culture." He said they would prioritize track record and find "a proven leader."
"We know what we're looking for and I think we're going to find it."