Berg, a former Blackburn player and Norway international, won just one of his 10 games as manager of the second-tier club, which has slipped to 17th place in the 24-team League Championship. When he took over, Rovers were fifth in the standings as they sought a quick return to the Premier League.
"This decision has been taken following a very disappointing sequence of results," Blackburn said in a statement, a day after a 1-0 loss at Middlesbrough.
Berg was the second second-tier manager in less than 24 hours to lose his job, with former European champion Nottingham Forest dismissing Sean O'Driscoll on Wednesday.
Premier League champions in 1995 and then an established club in the English top flight, Blackburn has struggled since Indian poultry giant Venky's paid 23 million pounds (then $36.8 million) for a 99.9 per cent stake in the club in November 2010.
The new owners immediately fired Sam Allardyce and replaced him as manager with Steve Kean, a unpopular decision that sparked mass unrest among fans.
The team was relegated from the Premier League last season and Kean resigned in September despite an encouraging start to life in the League Championship. Under the mild-mannered Berg, Blackburn failed to perform despite having one of the strongest teams in the division.
The loss to Middlesbrough was its fifth in its last six games.
"It goes without saying that I am bitterly disappointed to have been relieved of my managerial duties at Ewood Park after just 57 days since my appointment," Berg said in a statement released by the League Managers Association.
"It was an honour for me to manage a club that is so close to my heart and I now wish all of them (the fans) every success for the rest of the season and beyond.... (The players) have all done their best and unfortunately the results in these 10 games have not reflected their performances."
Assistant manager Eric Black as well as the first-team coach and goalkeeping coach also departed with immediate effect.