In a statement Saturday, the Albanian soccer federation said it had terminated the 46-year-old Italian’s contract.
Albania lost 2-0 at home to Turkey in their opening Euro 2020 game on Friday.
Panucci led Albania for 15 matches — winning four, drawing two and losing nine. He became coach in July 2017, replacing another Italian, Gianni De Biasi, who took Albania to its first major tournament at the Euro 2016 finals.
Albania plays at Andorra on Monday in its next Group H game with former national team players Ervin Bulku and Sulejman Mema in charge.