The former Macclesfield Town, Port Vale and Shrewsbury boss has been relieved of his duties with the club winless in six.
A steady start overall currently sees York sitting in the top half - but he said following Saturday's defeat to Altrincham that results need to change.
Askey took the club up in May via the National League North play-offs - something the Minstermen say they are “eternally grateful” for.
But that isn’t enough to keep him in his job, and the club’s board have decided a change is needed.
A statement read: “Following a number of discussions between the board and John Askey in recent weeks, York City Football Club has today decided to part company by ending his contract of employment.
“Given John’s popularity and his incredible success last season, we understand that many fans may be upset and confused by this decision.
"However, after taking numerous factors into consideration the board are confident that it is in the best interests of the football club.
“Recruitment of a new manager will commence immediately, and we aim to make an appointment by the end of the month. An interim manager will be appointed from within the club’s existing staff, with a further announcement due shortly.
“We are eternally grateful to John for his efforts to help us gain promotion last season and wish him the very best of luck in his future career.”