The relegation-threatened London side announced on Thursday they had parted company with the Italian and appointed Scott Parker as caretaker boss.
He leaves with Fulham 19th in the Premier League, 10 points off safety with 10 games remaining.
His last match in charge was a 2-0 loss at Southampton on Wednesday, an eighth defeat in nine games in all competitions.
Ranieri, who famously guided Leicester to title glory in 2016, was brought in last November after a disappointing start to the campaign – the club’s first back in the top flight – under Slavisa Jokanovic.
He made a promising start but was ultimately unable to reverse fortunes.
Chairman Shad Khan said in a statement: “Following our discussion this afternoon, Claudio Ranieri agreed to my decision that a change was in the best interest of everyone.
“Claudio’s tenure at Fulham didn’t produce the outcome we anticipated and needed when I appointed him as manager in November but, be assured, he is not solely to blame for the position we are in.
“Claudio walked into a difficult situation, inheriting a side that gained only one point in its prior eight matches, and he provided an immediate boost by leading our club to nine points in his first eight matches as manager.
“Though we were unable to maintain that pace thereafter, I am grateful for his effort. Claudio leaves Fulham as our friend and he will undoubtedly experience success again soon.”
Ranieri failed to recreate the magic he produced at Leicester and won just three of his 16 league matches in charge.
The 67-year-old said on the club’s website, www.fulhamfc.com: “I am obviously disappointed with the recent results and that we could not build on the good start we made following my appointment.
“I would like to thank the club, the players and the fans for the support they have given me during my time at the club.”
Parker, the former England midfielder who ended his playing career at Fulham, will take charge ahead of Sunday’s derby clash with Chelsea at Craven Cottage.
Khan said: “Scott’s immediate assignment is merely to help us stabilise, grow and rediscover ourselves as a football club. If Scott can answer that challenge, and our players respond to the opportunity, perhaps victories will follow in the months ahead.
“What’s most important at this moment, however, is to regroup in a smart and deliberate manner that will serve our long-term vision for sustainable success. If we’re able to do that and win some matches to make a stand late in the season, all the better.”
