Paul Ince will take temporary charge of Reading after Veljko Paunovic was sacked in the wake of the Royals’ win at Preston – their first in the league since November 27.
The Serb took charge at the Select Car Leasing Stadium in August 2020 and guided the club to a seventh-place finish in his first season in Berkshire.
But his side have lost 18 of their 32 league games this term and sit just five points above the relegation zone.
A club statement read: “Reading Football Club can confirm that the contract of first-team manager Veljko Paunović has been terminated by mutual consent.
“The Serbian was appointed as manager of the Royals in late August 2020 and without fans in the stands to support him or his side, we sustained a push for promotion for much of his maiden campaign in the Championship – only for our play-off hopes to fade in the final few weeks of 2020-21.
“This season, somewhat understandably, has proven more difficult – having to help lead the club through strict transfer embargo restrictions and contract limitations, an injury crisis like never before seen at our club, a global pandemic and the challenge of a six-point deduction imposed by the EFL.
“For these reasons, owner Mr Dai Yongge wanted to afford Veljko time to turn around a poor recent run of results that now sees us in a battle for second tier survival. However, with nearly a third of the season still remaining and every point now vital in our bid to retain Championship status, the decision has been mutually agreed to make a change.
“Chief Executive, Mr Dayong Pang, said “I met in person with Pauno yesterday morning and I would like to personally thank him for his commitment and dedication to our club during his time as first-team manager – but also his professionalism throughout what have been undeniably challenging circumstances this season. Everyone at Reading Football Club would like to wish Veljko the very best of luck in his future career.
“The board and I will now work diligently to identify the right candidate to take this club forward. This work will be done quickly but without undue haste as we fully appreciate the importance of our decision to appoint a new manager at this crucial stage of the campaign.”
“Former England captain Paul Ince, father to Royals loanee Tom Ince, has been appointed to take charge of first team affairs on an interim basis alongside Academy Manager Michael Gilkes, while we embark on the thorough search for a new permanent manager.
“The club will make no additional comment at this time but will provide further updates as soon as possible.”
Lucas Joao starred in the victory, netting twice inside the first 20 minutes before John Swift put the Royals in total control.
But the visitors switched off following their third and allowed Daniel Johnson to pull a goal back two minutes later.
Cameron Archer scrambled home with 16 minutes to go to set up a tense finish, but a beleaguered Reading side were able to stand firm as they claimed their first win in 13 matches.
Joao had got the visitors off to a flyer when he slotted home at the second attempt after his first effort had been saved by Daniel Iversen.
Emil Riis Jakobsen had a shot blocked from Ben Whiteman’s corner as Preston looked for a quick response.
Patrick Bauer headed behind for a corner as Joao prepared to connect with Swift’s cross, but he got on the end of another Swift pass minutes later to double the Royals’ advantage with a brilliant finish into the roof of the net.
Michael Morrison and Thomas Holmes combined well to keep out Scott Sinclair on the half-hour mark.
Brad Potts was replaced by Liam Lindsay on 35 minutes, before Iversen made a good reaction save to keep out Joao’s volley.
Riis Jakobsen blazed over just before the break after good pressing by Sinclair won the ball back from Holmes.
Whiteman made way for Ryan Ledson at half-time as Ryan Lowe looked to turn the game around, but Iversen was forced to turn Swift’s free-kick away for a corner as the visitors continued to set the pace.
Andrew Hughes cleared a Morrison effort off the line a minute later after Swift caused more bother with a good cross.
Swift then extended Reading’s lead on 55 minutes after he curled home to finish a fine team move.
But they switched off two minutes later when Johnson scored from the edge of the box with the help of a deflection.
Swift went close with an in-swinging free-kick on 71 minutes as Reading began to enjoy themselves.
However, Archer got Preston back into it after he got the finishing touch following a goalmouth scramble.
Sinclair shot just over on 79 minutes after Alan Browne played him in, before Ched Evans headed wide from a Sepp Van Den Berg cross.
Sinclair then headed narrowly wide as another Van Den Berg caused trouble on the stroke of full-time.