The former England midfielder was appointed on an interim basis in January 2026 and signed a permanent contract after the club secured a third-place finish in the Premier League last year.
But United have struggled to find form this season, with the team winning just three of their first 15 games across all competitions.
Carrick becomes the seventh manager to be dismissed by the club since Sir Alex Ferguson retired in 2013.
He is also the first of two Premier League managers sacked on Thursday, with the departure of Crystal Palace boss Pierre Sage confirmed hours later.
The Frenchman was relieved of his duties after just five months, with the club sitting at the bottom of the league.
Palace said it "would like to place on record its thanks to Pierre and his staff for their efforts during their time in South London, and wish them well for the future" in a statement.
United reportedly reached an agreement in principle on Wednesday for Mauricio Pochettino to be their next head coach.
Carrick's sacking follows Sunday's 4-4 draw with Aston Villa at Old Trafford - a result that leaves them 18th in the league table, with eight points from 10 league matches, their worst return at this stage of a season since the 1972-73 campaign.
The decision was made following a meeting between United's director of football Jason Wilcox, chief executive Omar Berrada, and co-owner Sir Jim Ratcliffe in Monaco on Wednesday.
The club intends to appoint a permanent successor as quickly as possible, a spokesperson said.
The club confirmed: "Michael rejoined the club in January and guided the team to a third-placed Premier League finish by winning 12 out of the remaining 17 games of the 2025/26 season, accumulating the highest points tally in the league during that period.
"After a disappointing start to the season, the club has come to the extremely difficult conclusion that a change is necessary in order to achieve our ambitions."
The statement added: "Michael is, and always will be, a Manchester United legend.
"Just as he did as a player, he has conducted himself with the highest standards of dedication and professionalism throughout his time back with the club.
"His leadership and achievements last season will always be fondly remembered."
Sky's sports correspondent Rob Harris said the club are "still negotiating the complete terms of his departure" - calling his dismissal the latest development in "a cycle of turmoil, of doom".
Describing the fans' anger at the club's leadership, he added: "They are still so angry 21 years on from the Glazers buying United, the American investors who haven't invested much, if anything, of their own money in the club.
"Instead, they've loaded it with debt, which has been the struggle to this day.
"Sir Jim Ratcliffe of Ineos was brought in in 2024 as a part owner, owning just under 30% but running day-to-day operations.
"Have things been any more tranquil? Has there been any more stability? Well, no, there's just more disarray in terms of the leadership of the club."
Former Chelsea and Tottenham boss, Pochettino, who recently signed a contract extension to remain the USA's head coach until the 2030 World Cup, is said to be interested in the Old Trafford position.
Sky Sports News understands that the 54-year-old Argentine has reached a verbal agreement in principle with the club, with United expected to pay around £7m to buy him out of his newly-signed contract.
Pochettino discussed the role with United on several occasions, including in 2022 when the club instead turned to Erik ten Hag.
Old Trafford chiefs were already considering alternatives to Carrick before United's game against Bournemouth at Old Trafford last month, Sky Sports News said.
Carrick played 464 games for United, winning five Premier League titles and the Champions League, along with a host of other honours.
The 45-year-old also played for Tottenham and West Ham and won 34 caps for England.
The handling of his dismissal prompted criticism from former United players, with Gary Neville caling the club "classless".
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Speaking on the Overlap's Stick to Football podcast, which was recorded before Thursday's developments, he said: "We're sat here today recording this programme knowing that Michael Carrick is going to be sacked tomorrow, knowing that they're speaking to Mauricio Pochettino, knowing that they've spoken to [Julian] Nagelsmann, [Eddie] Howe - and they should be doing that by the way, I'm not saying they shouldn't be doing that.
"But I think the fact they're in Monaco now and they can't sack him today knowing that it's happening, to me it just feels a little bit clumsy, it feels a little bit classless.
"I think if you live in Monaco, you can't leave a guy hanging for 24 or 48 hours just because you live in Monaco, that can't happen."
It was confirmed on Thursday morning that a new Notice of Intention (NOI) to appoint Administrators had been filed, giving a fresh 10 working-day window to secure its future, free from any creditor claims.
Owner Gordon Brothers further stated that Poundland was to be given enough money to cover this month's payroll in full.
It has been accused of pushing the discount retailer - which it bought over a year ago for just €1 - to the brink of collapse despite growing profitability, by rejecting offers for Poundland and its 600-strong store estate.
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It has left 10,500 jobs hanging in the balance.
A first notice to appoint administrators expired overnight, hours after bosses held a private meeting with parliament's business committee that saw its chair accuse the US investment firm of "behaving almost like a Wolf of Wall Street".
Critics claim Gordon Brothers, which Sky News revealed has been paid close to £20m since taking ownership of Poundland in June last year, favours a break-up of the company as it would prove more financially lucrative.
Gordon Brothers had frozen bosses' access to company funds, placing its operational functions in jeopardy.
But it later emerged that Poundland had received £10m to pay its way amid pressure from the government for a sale of Poundland as a going concern to preserve employment.
A memo sent to staff on Thursday, seen by Sky News, said that while that had allowed only "limited" orders to replenish store stock, further funds had been made available on Thursday.
Barry Williams, the chain's managing director, added in his email: "I understand the uncertainty is very worrying for you all, I can only apologise for that", he said while praising the workforce's efforts to maintain sales.
Poundland's board said in a statement: "Our stores remain open as usual during this period, and we thank our colleagues, suppliers and customers for their incredible and continued support."
Gordon Brothers added: "We support the Board's decision to extend the legal moratorium over the company by a further ten working days. This brings additional stability amid an ongoing sale process in the backdrop of increasing cost pressures and a difficult inflationary economic environment.
"With this decision, we are today able to confirm to Poundland employees that funds will be released to allow payroll to be made in full this month, while additional funds continue to be released to support Poundland's ongoing trading."
Mostafa Sepahvand, 41, carried out surveillance and reconnaissance between August 2024 and March last year with the goal of inflicting violence on "subjects" in the UK.
Among his targets were Mojtaba Pourmohsen and Kambiz Hosseini, journalists for London-based Persian broadcaster Iran International, and Jonathan Turner, a founder member of UK Lawyers for Israel.
He visited addresses linked to his targets, took photos and videos, and used platforms such as ChatGPT to research them online.
The prosecution said Sepahvand, who came to Britain in a lorry, intended to carry out a "violent attack" against at least one of the men.
Farhad Javadi Manesh, 46, who arrived in the UK by small boat, assisted in planning.
Sepahvand boasted of contacts inside the Iranian embassy in London, and said he wanted £150,000 to "finish off" one Iran International journalist, the trial heard.
He was also sent "tasking documents" from Iranian contacts believed to have been members of, or working for, the Iranian intelligence agency.
Sepahvand, of St John's Wood, north London, hoped by his actions to get a conviction for theft in Iran quashed.
In one message shown to jurors, he was told: "You are expected to hit or kill the journalist."
In a later voice note he complained about how little he had been paid for conducting surveillance, before adding: "They pay the £150,000, and I'll finish them off."
Sepahvand and Manesh denied engaging in conduct likely to assist Iran's intelligence service, but both were found guilty on Thursday.
A third man, Shapoor Qalehali Khani Noori, 57, was cleared of the charge.
Sepahvand also denied a charge of engaging in surveillance, reconnaissance and open-source research with the intention to commit serious violence against a person in the UK, but was convicted.
Manesh and Noori, both of London, were acquitted of engaging in surveillance and reconnaissance, with the intention that serious violence against a person in the UK would be committed by others.
Counter-terrorism police say it's the first time Iranian nationals have been prosecuted for National Security Act offences.
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At least 17 others are injured, with four in a critical condition, after the three-storey building collapsed on Wednesday afternoon.
The bodies of four more people were pulled from the rubble early on Thursday, the New York City Fire Department confirmed, bringing the death toll up to five.
New York mayor Zohran Mamdani said fire crews responded to the "devastating" collapse within one minute of the first 911 call.
Footage from news helicopters showed hundreds of rescuers scouring debris for survivors - and appearing to use a saw to cut through the wreckage.
"This has been an incredibly challenging and fast-moving situation - with precarious wreckage to navigate and dangerous voids beneath the surface", Mr Mamdani said.
Crews were seen pulling someone from the rubble of the building and placing them on a stretcher, passing them carefully from person to person.
More than 250 firefighters were deployed to the scene - and it is unclear how many people remain trapped.
New York City fire commissioner Lillian Bonsignore said: "This will be a prolonged operation. Its cause is under investigation."
Seven children and a firefighter were among those injured.
Mr Mamdani added: "I want to ask New Yorkers to please take a moment to pray for those who passed away today and all of those who are mourning their loss, as well as for a fast and full recovery for all those who were injured."
New York's buildings commissioner Ahmed Tigani said that construction workers were excavating an empty lot next door for a new building when the collapse occurred.
Much of the rubble from the collapse was left in a huge pile inside the construction pit.
Another building that shared a wall with the structure saw its wall torn off, exposing the rooms inside, including a bedroom and closets.
As darkness fell on Wednesday night, crews deployed sniffer dogs and used flashlights to illuminate the area where they worked.
"The units are proposing dangerous and heroic work," Ms Bonsignore said.
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John Esposito, the fire service's chief of department, said crews encountered the scene while returning from another emergency - and immediately took action.
"We continue to search any void spaces looking for any victims, and we've removed a few from that collapse area," he told a news conference.
Mr Esposito added that there is concern of a second collapse - and firefighters will be on the scene for several days until they are confident no one else is trapped.
The Office for National Statistics (ONS) noted an acceleration in gross domestic product (GDP) from the 0.5% figure seen between April and June. It stated that the new quarterly figure was the highest since the first quarter of 2024.
That was despite just 0.2% growth being recorded in the month of September - the end of the latest three-month period that saw a rapid rise in fuel costs linked to the effects of the conflict in the Middle East and the Russia-Ukraine war.
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The resulting inflation pressures culminated in a Bank of England interest rate hike last week.
The energy-linked surge in prices is set to intensify in the coming months as wholesale natural gas costs remain elevated heading into the peak of winter.
They're currently 180% up on where they stood a year ago, threatening renewed harm to businesses and families alike, alongside the rise in borrowing costs.
ONS chief economist Grant Fitzner said of the latest data: "The economy grew robustly in the third quarter almost entirely due to strong and widespread growth in the services sector.
"Within services, computer programming again increased strongly, as it has all year, registering its fastest growth in the last three years. We continue to see evidence that AI linked businesses helped to boost this sector."
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The ONS data showed growth from computer programming, consultancy and related activities rose by 4.4%, cementing the category's position as the largest driver of GDP growth across 2026 to date. It will include investment in data centres.
There was evidence, the report added, that many of the businesses reporting the largest increases in turnover were involved in activities related to AI and cloud computing.
The data also suggested that consumer spending remained resilient during the July to September period.
There has been evidence of greater caution since.
While there is currently downwards pressure on fuel prices, businesses have already been swallowing big rises to their energy costs - bills that are already being passed on.
Households on the energy price cap saw a 4% increase in October. A hike above £440 is currently predicted from January by the energy supplier EDF.
The poorest households secured some aid to shield them from the worst in last month's budget but the intensity of the energy shock is one reason why financial market participants currently see at least two further interest rate hikes by March next year, according to London Stock Exchange Group data.
Chancellor John Healey said in response to the ONS figures: "The Middle East conflict has hit growth worldwide, yet Britain is showing stand-out resilience."
He added: "Our UK economy is growing at the fastest rate in almost ten years, outside the pandemic.
"We are backing UK investment, innovation and fast growth firms. I want to bring back confidence in Britain. Breathing space now and fresh hope for the future."
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Yael Selfin, chief economist at KPMG, expected a rough ride ahead.
She said: "We expect the economy to lose momentum in the fourth quarter and broadly flatline as higher energy prices and interest rates dampen consumer demand. The Bank of England is likely to raise rates again, probably in December, to defend against inflation risks.
"Household spending growth was subdued in the third quarter as higher inflation, elevated interest rates and soft consumer confidence continued to weigh on demand. Rising unemployment expectations are adding to the caution, particularly around discretionary spending."