"The decision has been taken in the light of the position the club finds itself in the Premier League at the halfway point of the season," Bolton said in a statement.
Megson, who has been in charge since October 2007, leaves Wanderers in 18th place of the Premiership table.
The 50-year-old helped the team finish 13th last season.
Assistant manager Chris Evans and first-team coach will be in charge on a temporary basis.