The Englishman was appointed in January 2026 after former manager Enzo Maresca stepped down from his role - signing an initial six-and-a-half-year contract.
A promising start saw six wins from his first seven games in all competitions, including impressive performances in the Champions League's league phase to qualify for the knockout rounds.
Things quickly unravelled, though, with Chelsea embarrassingly eliminated from Europe after losing 8-2 on aggregate to PSG.
That drop off coincided with a poor return in the league and the Blues have now lost their last five Premier League fixtures - conceding 11 and scoring none to slip down to seventh in a packed table, just three points above 12th place.
"On behalf of everyone at Chelsea FC, we would like to place on record our gratitude to Liam and his staff for all their efforts during their time with the Club," a statement said.
"Liam has always conducted himself with the highest integrity and professionalism following his appointment midway through the season.
"This has not been a decision the Club has taken lightly, however recent results and performances have fallen below the necessary standards with still so much more to play for this season. Everyone at Chelsea FC wishes Liam every success in the future."
Rosenior recently hit out at his players following their 3-0 defeat to Brighton.
"I feel numb I'm so angry. I always speak on what I see and that was unacceptable. The goals we conceded were unacceptable and that is something I have to hold my hands up to," he said after the loss.
"Tonight was not tactical. This was about desire, spirit, courage and I did not see enough of that.
"Nowhere near good enough and we have to improve that."
Chelsea's last hope of silverware is the FA Cup, where they will face Leeds United in the semi-final on Sunday, April 26th.