Theo Epstein, the team's new president of baseball operations, announced the decision Wednesday after traveling to Florida to inform Quade.
Epstein praised Quade, but said the Cubs will benefit from someone who can come in "with a clean slate and offer new direction."
Quade got the job after a 37-game audition at the end of the 2010 season, replacing Lou Piniella on an interim basis. And after the Cubs responded to him and went 24-13, he was chosen over Hall of Famer Ryne Sandberg to lead the team last season.
But Quade's first full season was a rough one that ended with a 71-91 mark and a fifth-place finish in the NL Central.
Criticism was part of the deal and he realized that, but it came from all angles.
Why didn't he intentionally walk Albert Pujols in an extra-inning game in St. Louis? The Cardinals star then hit a winning homer. Why did he leave starter Randy Wells in so long against the White Sox, resulting in another tough loss?
Why didn't he play September call-ups more with the Cubs so far out of contention?
Quade's season got off to a difficult start when the Cubs lost two members of their starting rotation, Andrew Cashner and Wells, in early April. It didn't get much better.
Quade was ejected seven times in his first season and he got in a screaming match with starter Ryan Dempster, one of the clubhouse leaders. His general manager, Jim Hendry, was fired during the season, Ryan Theriot, now with St. Louis, said the Cubs were playing like a Triple-A team and mercurial right-hander Carlos Zambrano was a handful all year, criticizing his own closer and then cleaning out his locker after giving up five home runs to Atlanta.
The 54-year-old Quade managed more than 2,300 minor league games in the Montreal, Philadelphia, Oakland and Cubs farm systems before arriving in Chicago.
The Chicago-area native was originally selected by the Pirates in the 22nd round of the 1979 draft out of the University of New Orleans and spent four seasons as an outfielder in Pittsburgh's minor league system before entering the coaching ranks.
He held his first managerial position in 1985, with Class A Macon. He was promoted to Piniella's staff after a running the Iowa Cubs from 2003-06, a stint that included two first-place finishes in his four seasons. He was Chicago's third base coach starting in 2007 until taking over for Piniella. He was also a first base coach in Oakland from 2000-02.
Epstein said the search for a new manager will begin immediately.
"We are looking for someone with whom and around whom we can build a foundation for sustained success," he said. "The next manager must have leadership and communication skills; he must place an emphasis on preparation and accountability; he must establish high standards and a winning culture; he must have integrity and an open mind; and he must have managerial or coaching experience at the major league level.
"I want to thank Mike for his nine years of excellent service to the Cubs, and we certainly wish him well in the future."