Rob Edwards has been sacked after just seven months.
The 43-year-old was dismissed by Wolves following an end-of-season review, after taking over in November and signing a three-and-a-half-year deal.
His time in charge saw the club relegated from the Premier League after eight consecutive seasons in the top flight.
Nathan Shi, Wolves’ executive chairman, said: "This has been an extremely difficult decision.
"Following the end of the season, we undertook a thorough review of every aspect of the football operation.
"This process involved careful consideration of many factors and extensive reflection on what we believe is required to help the club progress over the coming years.
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"Our decision was not about character, professionalism or dedication.
"It was about determining what we believe gives Wolves the strongest opportunity to move forward from a sporting perspective."
Under Edwards, Wolves finished bottom of the table, 21 points from safety, and won just five of 30 games in all competitions.
Despite some signs of progress, the club’s leadership decided "a different football direction would better align with the style, identity and level of competitiveness we want to establish."
Edwards has now suffered relegation from the Premier League twice in as many seasons, after also going down with Luton Town in 2024.
The Press Association reports that Wolves are expected to appoint Cesar Peixoto, currently head coach of Portuguese side Gil Vicente.
Peixoto led the club to a sixth-place finish in the Primeira Liga last season.
Edwards had remained publicly positive and engaged in early summer business for Wolves, including the signings of Kieran Trippier and Raul Jimenez, and a new contract for key midfielder Andre.
In a recent interview following Jimenez’s arrival, Edwards had said: "Hopefully they [the fans] believe more in what we’re trying to do, but there’s a lot more we’ve still got to do and there’ll be more to come.
"We know things need to improve and we’re working really hard to try and do that as quickly as possible."
Trippier, in his first comments to the club, said: "I had a good chat with the manager and what struck me first was how passionate he was for helping the club move forward to get out of the Championship next season.
"You just have a feeling straight away and I felt that chemistry straight away with the manager."
Despite such early optimism and ongoing squad strengthening, Edwards will not lead Wolves into the new season, with the club now choosing a fresh start in the dugout.
