In a statement posted on their website on Wednesday, Liverpool FC has decided to terminate the contract of Kenny Dalglish as their manager after he and his assistant, first team coach Steve Clarke, met with the Fenway Sports Group in Boston earlier this week.

In a show of solidarity with Dalglish, Clarke, who was Kenny's first major appointment as manager, tendered his resignation as well.

The ownership expressed disappointment with the results of the just-concluded season and felt a change was needed to build on the progress that they have made. The sacking is the third major move that the Americans have conducted, after the removal of Damien Comolli as the director of Football and Peter Brukner as head of sports medicine a month ago.

Principal owner John Henry expressed his appreciation for the man fans have dubbed as "King Kenny," calling him the "heart and soul" of the club. He added that he personifies everything that is good with Liverpool Football Club, and that he will always be a part of the family in Anfield.

Kenny, although disappointed, remains proud to have served Liverpool.

"It has been an honour and a privilege to have had the chance to come back to Liverpool Football Club as Manager. I greatly appreciate the work that Steve, Kevin, the players and all of the staff put in during my time and feel proud that we delivered the Club's first trophy in six years winning the Carling Cup and came close to a second trophy in the FA Cup Final. Of course I am disappointed with results in the league, but I would not have swapped the Carling Cup win for anything as I know how much it meant to our fans and the Club to be back winning trophies.

"Whilst I am obviously disappointed to be leaving the football club, I can say that the matter has been handled by the owners and all concerned in an honourable, respectful and dignified way and reflects on the quality of the people involved and their continued desire to move the football club forward in the same way as when they arrived here.

"I would like to thank all of the staff at the Club for their effort and loyalty. I said when first approached about coming back as Manager that I would always be of help if I can at any time and that offer remains the same.

"Finally, I want to put on record my heartfelt gratitude to Liverpool's fans, who have always given me and the Club their unwavering support. Without them neither the Club nor I would have achieved anything."

The Reds ended up with 52 points, tied for 8th in the Premiership with Fulham, finishing ahead of the Cottagers thanks to goal difference. They did however, guarantee themselves European football with a penalty-shootout victory over Cardiff City in the Carling Cup. They finished four points behind their Merseyside rivals Everton, whose transfer budget is much less than theirs.

This is Kenny's second go-around with Liverpool, having served as its manager previously from 1985-91, after replacing Roy Hodgson in January 2011 as a caretaker manager. Improving from their 12th place finish at the time to end in sixth at the close of the 2010/11 season, he was rewarded with a three-year deal.