Bruce Feldman of FOX Sports reported on Sunday that Jones has informed his staff he is being let go.
Before Sunday's decision, the Volunteers had suffered a string of embarrassing losses, including a 57-17 blowout to Missouri last week.
Jones signed a four-year contract after not being able to make it out of year one. Tennessee, 4-6 overall and 0-6 in the SEC, in danger of missing a bowl game for the first time since 2013, Jones' first season.
The Vols will need an interim head coach and Brady Hoke is the next man up. He was making $4.11 million per year at Tennessee. An inexplicable loss at SC past year ruined Tennessee's division title hopes.
Jones was just 3-9 in his past 12 SEC games dating to last season.More news: Tunisia complete Africa's World Cup line-up with Libya draw
More news: Reese Witherspoon And 'Friends' Star Jennifer Aniston Returns To Television
More news: SpaceX to launch and land Falcon 9 rocket in Atlantic Ocean
Defensive line coach Brady Hoke, the former head coach at MI, will serve as UT's interim coach for the remainder of the season.
It will be interesting to see what impact the coaching change has on Tennessee's current recruiting class, but at least two top players shared that they are remaining committed for the time being. Jones has gone 34-27 during his Tennessee tenure and is 14-24 in the SEC.
Tennessee hasn't reached the SEC championship game since 2007 and hasn't won a conference title since its 1998 national championship season. He also coached at Ball State and San Diego.
The 59-year-old Hoke has head coaching experience at Ball State (six years), San Diego State (two years) and MI (four years), and after his dismissal at MI after the 2014 season, Hoke was out of coaching for a year before spending the 2016 season as Oregon's defensive coordinator.