"it is with regret that Manchester city football club announces that Roberto Mancini has been relieved of his duties as Manchester city manager," the club said in a statement.
sources said he had failed to achieve any of the club's targets, with the exception of qualification for next season's Champions League".
City were beaten by Ben Watson's 90th-minute header at Wembley as Wigan, struggling to avoid relegation from the Premier League in 18th place, became the lowest ranked team to win the FA Cup since West Ham in 1980.
City thrashed rivals United 6-1 at Old Trafford in October 2011 en route to their first Premier League title and although they beat them again on their home ground this season, Sir Alex Ferguson's team wrapped up their 20th league crown last month with four matches remaining.
Mancini's record in the Champions League has also come under scrutiny.
The furthest he has been in Europe's elite competition is the quarter-finals, with Inter Milan, and City have been eliminated in the group stages of both their campaigns during his reign.
Having finished third behind Bayern Munich and Napoli in 2011 they again failed to qualify this term, winning none of their six matches in a formidable group that also contained Borussia Dortmund, Real Madrid and Ajax.
Their tally of three points was the lowest by an English side in the group stage of the competition.
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