The legendary Argentinian's position had been in doubt since last month when the club's entire board resigned following a trophyless season.
Maradona was appointed boss in May last year but after only managing eighth place in the Pro-League in his first season in charge he has been sacked after meeting the new board on Tuesday.
"Following a meeting held by the board of directors of Al Wasl Football Company held today [Tuesday], to evaluate the technical staff of Al Wasl Football Team under the leadership of coach Diego Maradona, it was decided to terminate the services of coach Diego Maradona and his technical staff," a statement from the club said.
Maradona still had a year to run on his contract with the ambitious Dubai-based club.
The 51-year-old had been brought in to help boost the club's profile, both on and off the pitch, but in addition to a disappointing league campaign they crashed out of the President's Cup and Emirates Cup at the quarter-final stage.
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