The Swede left his post by "mutual agreement" on Monday night following the club's mediocre start to the npower Championship season. The Foxes had been heavily tipped for promotion, but a record of just five wins from 13 league games led to Eriksson's demise.
A statement on the club's official website read: "Academy director Jon Rudkin and coach Mike Stowell will jointly assume the role of acting manager of the first team, with assistance from development coach Steve Beaglehole. This will begin with training on Tuesday morning ahead of Saturday's npower Championship trip to West Ham United."
The statement continued: "The process of recruiting a new permanent manager will begin in the coming days. There will be no further comments from the club or any comment on the recruitment process until an appointment is made."
Martin O'Neill, who was in charge of Leicester for five years and led them to the Premier League, as well as two League Cup triumphs, has emerged as the early favourite to succeed Eriksson, while Mark Hughes and Alan Shearer have also been touted as potential replacements.
Much was expected of the Foxes under Eriksson after an outlay of more than ?10million on transfer fees alone in the summer, but they have struggled for consistency this term. Although they are only five points adrift of the automatic promotion places in the Championship, a 3-0 defeat at home to lowly Millwall on Saturday left Leicester in 13th place.
That was the final straw for the club's Thailand-based owners Asia Football Investments, who held a meeting on Monday afternoon to discuss ending Eriksson's one-year stay at the King Power Stadium. And his departure was confirmed later in the evening.
"Leicester City Football Club has confirmed that, by mutual agreement, Sven-Goran Eriksson has ceased to be the first team manager, with immediate effect," said the statement. "First team coach Derek Fazackerley has also left the club.
"The club and its board of directors would like to thank Sven and Derek for the contribution they have made to Leicester City during their 13 months at King Power Stadium."
Leicester were in the relegation places when Eriksson, having just finished a stint with the Ivory Coast national team, replaced Paulo Sousa as manager in October 2010. He guided them to a respectable 10th place last season.