The club’s board took action following the 5-1 defeat to Barcelona at the Nou Camp.
Sunday’s defeat leaves the club ninth in La Liga, seven points behind leaders Barcelona.
Lopetegui, who was named as Real manager days before he was preparing to lead Spain into this summer’s World Cup, won four of his 10 league games in charge.
Their last league win was a 1-0 win over Espanyol on September 22 and has been followed by four defeats and a draw.
Madrid were also beaten 1-0 by CSKA Moscow in the Champions League, where they are joint leaders with Roma in Group G with six points from three games.
Early candidates to replace Lopetegui include former Chelsea manager Antonio Conte.
Santiago Solari has been placed in temporary charge of the team with his first game coming in the Copa del Rey with Melilla on Wednesday.
