The club have only won a single game since October – an away victory over Arbroath in the previous round.
Motherwell’s last home victory was in August, with just goal difference keeping them off the bottom of the Scottish Premiership.
Stuart Kettlewell will take interim charge against St Mirren on Wednesday.
“Unfortunately, due to a number of factors, his time in charge hasn’t worked out the way we all really hoped it would.
“Although this decision has been difficult, we feel it is necessary as we look towards the last third of the Premiership season.”
Hammell, the club’s post-war appearance record holder, took over from Graham Alexander following Motherwell’s collapse against Sligo Rovers in Europa Conference League qualifying.
Despite a positive start, victories, particularly at Fir Park, proved difficult to come by as injuries and individual mistakes took their toll.
The Lanarkshire side spurned a 2-0 lead against 10-man Kilmarnock in their first game back from the World Cup break to draw 2-2, and have lost to fellow strugglers Ross County, St Johnstone and managerless Aberdeen in recent weeks.
Hammell, who will depart along with assistant Brian Kerr, was heavily backed in the January transfer, bringing in nine players to try to preserve their top-flight status.
“There was an inevitability of what has happened. He’ll have been well aware that the results weren’t good enough. You kept waiting for it to turn for Motherwell but it never did and at some point something has to give because of the financial implications of relegation. It’s too big a risk.
“It’s really disappointing for Stevie and a really tough introduction to management for him. Hopefully he won’t be out the game too long.
“For Motherwell it is two managers sacked in seven months. It is a club desperately in need of stability. I’m sure Stuart will do a good job in the interim but they need to get the new manager in place and it needs to be the right manager. The season is going to be over before you know it. The players need a massive lift in confidence.”
