Mihajlovic signed a three-year deal with the club to replace Jorge Jesus on June 18, having been identified and appointed by former club president Bruno de Carvalho.
However, de Carvalho was a controversial figure at the club and opted to stand down on Sunday after the fans voted for him to resign from his position.
A meeting of club members saw them vote for Mihajlovic to follow the man that appointed him out of the door, with the club hoping to appoint a successor by Monday.
"Sporting have decided to end his probationary period and cancel his contract," announced de Carvalho's replacement Jose Sousa Cintra at a press conference.
"We will quickly seek a new coach, who should be presented by Monday."
A tumuluous season off the pitch last year, including a vicious attack on players by fans led to a number of stars cancelling their contracts, with the news of Mihajlovic's departure merely the latest step in the Sporting soap opera.
Cintra pointed to Mihajlovic's desire to change pre-season preparations as a major factor in the club's decision to dismiss the Serb.
"Sporting had made a contract with Mihajlovic for three seasons. It turns out that he started working on June 18, and the first thing he did was to change the pre-season preparations of Sporting's football team," he explained.
"Sporting have commitments in pre-season, there are four games to play and changing them leads Sporting to lose as much as €300,000. This is important.
"These things are unpleasant and I do not want to get into a lot of confusion and a lot of talk on this topic, just and only to say that in the face of these attitudes, and because we are still in the experimental period that is 15 days, Sporting decided to terminate the contract.
"Therefore, the head coach is already out of the plans for the next season."
Despite promising a quick appointment, Cintra ruled out a return for Augusto Inacio, who led the club to the Primeira Liga title in 1999-2000.
"We will try to resolve the question of the new coach quickly," he added. "I hope he is a trainer with strength, who wants to add to the ambition of Sporting.
"And the ambition of Sporting, as everyone knows, is to fight for the first place.
"To curiosity of all, joys of some and sadness of others, Augusto Inacio will not be the coach of Sporting. It will be another coach, who I hope will do a good job at Sporting."