The club are currently bottom of the Championship and haven't won a game since the start of November - conceding 26 goals in that time.
"Plymouth Argyle can confirm that the club and Head Coach Wayne Rooney have mutually agreed to part ways with immediate effect," Plymouth confirmed.
"Departing the club with Rooney will be Assistant Head Coach Mike Phelan and first team coach Simon Ireland.
"We would like to thank Wayne and his team for all their efforts and wish them well for the future."
Rooney departs after winning just four of his 23 league fixtures, all of which came at home.
Argyle have the worst away record in the division having picked up just two points on their travels all season.
“I would like to take this opportunity to thank the Board of Plymouth Argyle Football Club, in particular Simon Hallett and Neil Dewsnip who I shared great relationships with," Rooney said.
“Thanks also to all the staff who made me feel welcome and who make the club such a special place, the players and fans for their efforts and support during my time as Head Coach and I wish them all the best for the future.
“To the Green Army thanks for making the games at Home Park so special, they are memories that we will share forever.
“Plymouth Argyle will always hold a special place in my heart, and I will continue to look out for and take interest in their results.”
Plymouth are next in action on New Year's Day against Bristol City.