Sousa said: "To be sacked after being told that there was a long-term strategy at the club is something that I find very surprising."
Sousa joined Leicester in July after taking Swansea to the brink of the Championship play-offs last season.
But the Foxes are currently bottom of the Championship with only one win from their first nine matches this season.
The former Portugal international midfielder's final game in charge was Leicester's 4-3 defeat at Norwich on Tuesday night.
A statement on the Leicester City website said: "The decision has been taken as a result of the club's poor run of results this season.
Leicester City Football Club has had 14 managers since 2004 and six whilst the current chairman has been at the club
Chief executive of the League Managers Association Richard Bevan
"The club would like to state that Paulo Sousa is a first-class individual, but that this decision has been taken in the best interests of the club and our ambitions are to move up the Championship.
"The search for a new manager begins immediately and club anticipates a quick appointment."
Leicester chairman Milan Mandaric had backed Sousa before Tuesday night's defeat saying he would give the manager "a chance to turn things around".
Following that defeat, Sousa remained defiant, stating: "I am more positive than ever because I feel the right attitude and spirit."
Richard Bevan, chief executive of the League Managers Association, said: "How can a chairman expect to deliver success at a football club when a talented manager is recruited and dismissed within two months?
This is the problem with football these days no patience to allow a new manager to settle in
DruDrutheRam
"Knee-jerk dismissals, and the chopping and changing of managers will not deliver success on the field and is incredibly destabilizing to the entire club.
"Paulo's sacking is even more disappointing in light of the chairman's comments on Paulo's appointment in the summer, when he stated he was 'delighted to acquire a manager of such great calibre'.
"Leicester City Football Club has had 14 managers since 2004 and six whilst the current chairman has been at the club.
"Clearly the club has to examine its manager recruitment strategy as their current approach does not work.
"It is damaging to the club and its fans and is an inappropriate way to treat talented managers and their careers."
The Foxes are rooted to the bottom of the Championship table with just five points from their first nine matches.
I have had a lot of contact with clubs in the last week, that's normal, but I won't comment on this story
Sven-Goran Eriksson
The former QPR boss led Swansea to a seventh-placed finish in the Championship last season, missing out on the play-offs by a single point.
He took over at Leicester from Nigel Pearson in July, who left his post to manage relegated Hull City.
Sven-Goran Eriksson has been linked with the now vacant post at the Walkers Stadium, but he refused to comment when asked by the BBC.
The former Notts County director of football said: "I have had a lot of contact with clubs in the last week, that's normal, but I won't comment on this story."
Paulo Sousa's last game in charge of Leicester City
Source: BBC Sport
Source: BBC Sport