Greg Abbott, the club's assistant manager, will take charge on a caretaker basis with his first game being Saturday's FA Cup first round game against Grays Athletic.
"The club thank John for his service over the last 13 months but after suffering 10 defeats and a draw in our last 11 games [in all competitions] - a run which has seen us slide from second to 20th in the League One table - we agreed the time had come for us to go our separate ways," read a statement from the club.
"Greg [Abbott] had been hugely disappointed not to get the manager's job here on a full-time basis last season after having been caretaker manager following Neil McDonald`s departure until John Ward`s appointment. That was despite having won five and drawn two of his 10 games in charge.
"We would ask all Carlisle United fans to give their full backing to Greg and the squad, starting with Saturday`s FA Cup first-round tie at home to Grays Athletic."