Die Schwaben were beaten 2-1 by Augsburg at the weekend, prompting them to relieve the 47-year-old of his post after less than two years in charge
Labbadia, 47, took charge at the Mercedes-Benz Arena in December 2010 and had signed a contract extension in January, but he has paid the price for a winless start to the campaign.
Stuttgart scraped past Bulgarian side Botev Plovdiv on away goals in the third qualifying round for the Europa League but have lost each of their domestic fixtures so far, including Sunday's 2-1 reverse away to Augsburg.
After an indifferent start to the 2012-13 season, Stuttgart recovered to secure a safe mid-table position, while also reaching the final of the DFB-Pokal - where they were defeated by Bayern Munich.
Stuttgart opened their Bundesliga season with a 3-2 defeat to Mainz, and followed that up with a narrow 1-0 loss away to Bayer Leverkusen, sealed by a Daniel Schwaab own goal on his return to the BayArena.
Defeat in their Europa League play-off first leg to Rijeka was followed up by Sunday's capitulation in Bavaria to Augsburg.
Goals from Halil Altintop and Jan-Ingwer Callsen-Bracker had put the hosts ahead at the SGL Arena and, despite Vedad Ibisevic's penalty before half-time, hopes of a comeback were dashed as Ibrahima Traore was dismissed just six minutes after coming on as a substitute in the second half.
