A run of five defeats in seven Premier League games also contributed to Hughes’ departure and he leaves with the club in the relegation zone.
Hughes, 54, had been in charge of the Potters for four and a half years.
Stoke, who play Manchester United on 15 January, say they will “look to appoint a new manager as soon as possible”.
A section of Stoke fans called for him to leave and held up banners throughout the 2-1 defeat at the Ricoh Arena.
After the game, the Welshman said he did not think the defeat changed the situation regarding his future and said it “might be a blessing” for the rest of the season.
Hughes, a former Manchester City, Blackburn Rovers, Fulham and QPR boss, succeeded Tony Pulis at Stoke in May 2013 and was the fourth longest-serving manager at a Premier League club.
He guided Stoke to three straight ninth-placed finishes, dropping to 13th last season.