Austin took the reins at Northampton following Jimmy Floyd Hasselbaink's exit from the club, but it has been a short spell in charge.
He could not stop the slide into League Two at the end of last season, and the bad form has continued on his watch in the opening stages of this campaign.
Northampton find themselves in 21st place, with just one win from their opening 12 games this season.
"Northampton Town can confirm following discussions that they have parted company with manager Dean Austin," the club said in a statement.
"Dean has worked extremely hard for the football club both last season and this. We thank him for his efforts and we wish him well for the future."