They are 12th in the Championship and sit seven points off the top two after a tumultuous summer.
Sportsmail understands John Terry is a genuine contender to take over, although it is unclear whether the former England captain would be comfortable succeeding the manager who took him to Villa. One supporter threw a cabbage at Bruce before the game and West Midlands Police are investigating.
"We would like to place on record our gratitude to Steve and his team for their hard work and commitment". We wish them well for the future.
Villa, who won the European Cup in 1982, were relegated to English football's second tier at the end of the 2015-16 season. Villa confirmed the sacking in a statement in which they said Bruce's assistants had also had their contracts terminated.
Managerless Aston Villa now sit in the bottom half of the Sky Bet Championship table after winning just three of their opening 11 matches under former boss Bruce.
Juan Carlos Osorio managed the Mexico side that beat Germany at the World Cup
"Kevin MacDonald, Aston Villa U23s manager, will be in charge of the team for our trip to Millwall on Saturday".
But the improvement in form has not been forthcoming and Bruce has now been axed by new owners Nassef Sawiris and Wes Edens.
Bruce led Villa to the Championship play-off final last season while operating on a reduced budget and having lost both parents in the space of three months.
Bruce has also been manager at Huddersfield Town, Wigan Athletic (twice), Crystal Palace, Birmingham City, Sunderland and Hull City.