The former Birmingham City defender, 54, leaves Twerton Park after more than seven years.
The Romans have struggled in the Vanarama National League South this season, the club sitting one place above the relegation zone. They exited the FA Trophy after a home defeat to Chertsey Town on Saturday.
Goalkeeping coach Lee Kendall and Bath’s senior players will take charge of the match against Maidstone United on Tuesday night.
The Somerset club said in a statement that they have “mutually agreed to part company with immediate effect”.
Gill said: “It has been an absolute privilege to manage Bath City Football Club for the past seven years. It has been a huge part of my life and I am grateful to Nick and the board for giving me the opportunity.
“I hope everyone at the club has seen my loyalty throughout my time I have always been fully committed to the project at Bath City.“
Chair Nick Blofeld said: “The club would like to put on record our gratitude to Jerry for his hard work over the past seven years, which saw us reach the play offs three times and win the Somerset Premier Cup. We wish him all the best for his future endeavours”
Blofeld added: “We’re grateful that Lee Kendall has agreed to take the team for the next few weeks. We are now focussed on the recruitment process and will be updating the supporters in the near future on this. In the meantime, we hope that fans will come along tomorrow, to show their support and get behind the team.”