The 35-year-old replaced Danny Searle at the Kuflink Stadium in September, but has been unable to turn the club’s season around.
Fleet remain bottom of the National League table, and have won one game all season.
Tuesday night’s 2-0 defeat at AFC Fylde was their 14th defeat in 21 matches and the Kent side sit 11 points adrift of safety.
Josh Wright has been placed in charge, but the club have not confirmed the length of time he will be in the dug-out.
“Following discussions today between the club and Harry Watling, it has been mutually agreed to part ways,” Ebbsfleet announced in a statement.
“The club wishes to place on record our thanks to Harry for his efforts since joining in September.
“Josh Wright will take the role of first-team manager going forward, assisted by David Kerslake.”
Ebbsfleet have gone 422 minutes without scoring a league goal and exited the FA Trophy following penalty defeat at Sutton United last Saturday.
This weekend they face a trip to Barnet, who have won all but one home game so far this season.