Dalglish, 61, was in his second spell with the club after taking over from Roy Hodgson in January 2011. He also managed the team from 1985-91.
Liverpool announced the move Wednesday after rumors had spread quickly across the web.
Fenway Sports Group (FSG) and Liverpool Football Club announced that Kenny Dalglish is to leave his post today as Manager after having his contract terminated.
After a careful and deliberative review of the season, the Club came to the decision that a change was appropriate. It is not a decision that was reached lightly or hastily.
The search for a new Manager will begin immediately.
Liverpool finished eighth in the English Premier League this past season after spending heavily in the summer.
With Dalglish out, here are six possible replacements.