The Amaranto lost 3-0 at home to Parma on Sunday to concede their fourth straight defeat.
Their dismal run of form has seen Livorno drop to 19th place, three points adrift of safety at the halfway stage of the campaign.
A statement from the club read: "Livorno announces it has dismissed coach Davide Nicola.
"The club wishes to thank the coach for his professionalism and the work done."
Nicola guided the Tuscan club to promotion to Italy's top flight last summer in his first season in charge.
The Amaranto have won just three of their 19 games so far and travel to the Stadio Olimpico to face Roma on Saturday.
Former Livorno tactician Attilio Perotti has been strongly linked as Nicola's replacement.