Kenny Dalglish has been removed from his role as Liverpool FC manager, the Anfield club have announced.

The 61-year-old replaced Roy Hodgson for his second spell in charge in January 2011, signing a permanent contract in May, and this season won the English League Cup and reached the FA Cup final, but his team were only able to finish eighth in the Premier League. In his previous spell at the helm from 1985 to 1991 Liverpool won what remains their three most recent league titles.

A statement read: "After a careful and deliberative review of the season, the club came to the decision that a change was appropriate. It is not a decision that was reached lightly or hastily. The search for a new manager will begin immediately."

Dalglish said: "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 [Clarke], Kevin [Keen], 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 and came close to a second.

"Of course I am disappointed with results in the league, but I would not have swapped the [League] Cup win for anything as I know how much it meant to our fans and the club to be back winning trophies."

Chairman Tom Werner added: "He didn't ask to be manager; he was asked to assume the role. He did so because he knew the club needed him. He did more than anyone else to stabilise Liverpool over the past year and a half and to get us once again looking forward. We owe him a great debt of gratitude.

"However, results in the Premier League have been disappointing and we believe to build on the progress that has already been made, we need to make a change."

Liverpool will begin the 2012/13 UEFA Europa League in the third qualifying round.