The defeat leaves Spurs in seventh place in the Premier League table, eight points behind leaders Arsenal and comes less than a month after they were thrashed 6-0 by Manchester City.
Goal reported last week that the relationship between Villas-Boas and Daniel Levy had deteriorated to the point where he was no longer expected to remain at White Hart Lane beyond this season.
But following Sunday's humiliation Levy, who looked less than impressed watching from the executive box, has decided to take immediate action.
"The club can announce that agreement has been reached with Head Coach, Andre Villas-Boas, for the termination of his services," a statement read.
"The decision was by mutual consent and in the interests of all parties."
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