The Minstermen, whose new owners invested heavily during the summer with the ambition of a promotion push, have started the new season sluggishly.
They are the only National League club yet to win and on Bank Holiday Monday slipped to a home defeat to Rochdale, capping off an unimpressive August.
They have taken two points from a possible 15 and only deduction-hit Southend United sit below them in the table, despite signing 17 new players over the close season.
York are the second club to make a change over the Bank Holiday weekend after Eastleigh parted ways with Lee Bradbury.
The departing manager has been offered a new role internally within the club, which is yet to be accepted.
York will immediately get down to work replacing Morton, who stepped in following David Webb’s sacking last February. He was placed in interim charge before becoming the club’s permanent manager but was unable to get off to a satisfactory start to the new campaign at the LNER Community Stadium.
City, who face a trip to Ebbsfleet United on Saturday, have placed assistant manager Tony McMahon in caretaker charge.
The club has reluctantly taken the decision to relieve Mikey Morton of his duties,” they announced in a statement on Saturday night.
“The club wishes to place on record its sincere thanks to Mikey for his work, passion, and commitment since joining the Club in February.
“We wish Mikey every success in his future career, and he will always be welcome back at the LNER community stadium. The club see Mikey as an asset and have offered him a role internally so await his decision.
“The club will now begin the process of recruiting a new first team manager.In the meantime, assistant Manager Tony McMahon will take charge of the first team supported by first team staff.”