Huddersfield slipped to fourth place in the race for automatic promotion from npower League One after losing 1-0 at home to Sheffield United on Tuesday night, their first defeat in 10 league matches.
Reports have since emerged that Clark is considering launching an unfair dismissal case via the League Managers' Association.
Academy manager Mark Lillis has been installed as caretaker manager and will take charge of the club against Exeter on Saturday.
Club chairman Dean Hoyle said in a statement: "This was a very difficult decision; one not taken lightly or in response to one result. Concerns have been raised over recent weeks.
"Lee and his coaching staff have put their all into the job over the past three seasons and he has made a huge contribution to the club.
"However with 16 matches to go we still have an opportunity to achieve promotion and we have made this change with this in mind.
"Huddersfield Town would like to place on record it's thanks to Lee and his coaching staff and wish them all the best for the future."
Clark, 39, who quit as first-team coach at Norwich to succeed Stan Ternent at the Galpharm Stadium, led Huddersfield to the npower League One play-off final in May and steered them to a new club record of 43 league games unbeaten this season as they maintained their challenge for a top-two finish.
PA sport understands that Clark is considering launching an unfair dismissal case via the League Managers' Association.