A sorry defeat in Peterhead on Tuesday night saw the Bairns leapfrogged by Partick Thistle at the top of the table with four games to play.
The Bairns had occupied the top spot for much of the season and commanded a lead of five points over Thistle and four to their nearest rivals just one month ago. However a slump including defeat to rivals Cove Rangers and the midweek loss where they failed to register a shot on goal has led to their departure.
Former Livingston head coach Gary Holt will take over on an interim basis. Holt is now sporting director at Falkirk but previously managed the club through season 2013-14 before leaving for Norwich City.
Chairman Gary Deans said: “It’s never easy having to ask people to leave the football club and this is no different. Both Lee and David, as well as Derek Jackson, have been good servants to this club but we all must acknowledge that things have not worked out as envisaged. Recent performances and results have not been good enough and change is required. We thank all three for their contribution to Falkirk FC over a number of years and wish them well for the future.
“We are grateful that Gary Holt has agreed to assume temporary control of first-team duties. This was not the role Gary was originally recruited for, and both he and the board of directors, are keen to undertake a rigorous process to recruit a new first-team coaching set-up.”