Emery, who succeeded Arsene Wenger 18 months ago, was given his marching orders after the Gunners board decided to act on a dire run of results and performances and with his players happy to see the back of him.
Freddie Ljungberg has been placed in temporary charge as Arsenal search for a replacement.
Arsenal chiefs held a meeting on Friday morning to discuss his future following the loss and decided to can Emery.
Before the Frankfurt game, Emery was expected to get the chance to lead Arsenal into the match against Norwich and turn around their form.
But the defeat in the Europa League accelerated the process and they decided to end his contract early.
Emery arrived for training as usual on Friday morning before being informed by head of football Raul Sanllehi, managing director Vinai Venkatesham and technical director Edu that he had lost his job.
He said his goodbyes to the players and left the training ground. Sportsmail understands key members of the playing squad were happy to see the back of Emery – having grown sick of his stale tactics and odd team selections.
Former Arsenal player Ljungberg has been put in interim charge of the team and has already met with the players to discuss their next steps. He took training on Friday morning ahead of the trip to Norwich.
Arsenal have also announced that they will now be carrying out the search for a new permanent head coach.
A statement from Josh Kroenke, son of majority owner Stan, said: ‘Our most sincere thanks go to Unai and his colleagues who were unrelenting in their efforts to get the club back to competing at the level we all expect and demand.
‘We wish Unai and his team nothing but future success.