The club currently sit at the bottom of the Championship but have four games in hand over rivals Millwall in 21st place. They were also beaten in Sunday’s FA Cup quarter-final against Sheffield United and new owner Roland Duchatelet seems to have lost confidence in Powell’s abilities.
“We have been working with Chris Powell and his representatives for a couple of weeks to try to agree a contract extension which would have seen us continue to work together,” Duchatelet told the club’s website.
“There was good progress, but we could not reach an agreement over the club’s football strategy going forward.
“The situation put a strain on the working relationship between Chris and the board. Therefore I think it is best for all parties that we part ways at this stage.
“I would like to thank Chris for his commitment and hard work over the past three years. The club enjoyed a number of good times under his leadership.”
He said the decision was “unavoidable”.
“Given the club’s position in the league and the number of important fixtures upcoming, I felt this difficult decision was unavoidable at this time. We will look to quickly appoint a replacement who we feel will give us the best chance of avoiding relegation from the Championship.
“I can assure supporters this was not an easy decision, but it has been made with the club’s future in mind. Time will tell if it is the right decision.”
Powell, whose contract was due to expire at the end of this term, was a popular figure at The Valley having made over 200 appearances as a player. He took charge in January 2011 and won League One the following season, before securing a top 10 finish in the Championship last year.
On Thursday he told the press he had agreed personal terms on a new deal, but admitted the contract was far from sealed as he waited on assurances on how the club will be run.
“We’ve agreed all the financial side of the contract – that didn’t take long – but we have to agree the football side, players and recruitment moving forward,” Powell told the South London Press.
“That’s where we are at.”
He is set to be replaced by Belgian Jose Riga.
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