The former Chelsea boss took charge at the San Siro in September, replacing Gian Piero Gasperini, who was dismissed after only five games in charge.
Despite Inter's poor run, president Massimo Moratti said
earlier on Monday: "I think that Claudio Ranieri will remain until the end of
the season."
Youth team coach Andrea Stramaccioni will take charge of the Nerazzurri.
Stramaccioni led Inter's youth side to a win over Ajax in the NextGen Series final on Sunday.
Following Sunday's defeat by AC Milan, Inter sit eighth in Serie A, 22 points behind their local rivals, who top the table.
They were also knocked out of the Champions League in the last 16 by Marseille earlier this month.
A statement on the club's website said: "President Massimo Moratti and everyone at Inter Milan would like to thank Claudio Ranieri and his staff for their professionalism, dedication and honesty during their time in charge of the team
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