"The association unanimously decided to relieve the coach of his duties and to appoint Hakeem Shakir as the national team coach," Iraqi Football Association Vice President Abdulkhaliq Massud told AFP.
Vladimir Petrovic lasted just five months in the job, and will be replaced by the national youth team's head coach.
Petrovic had signed a one-year contract for $800,000 when he was hired.
Shakir takes over as the Iraqi national squad tries to qualify for the 2015 Asian Cup, with a match against Saudi Arabia scheduled for October 15.
FIFA in July barred Iraq from hosting international football friendlies due to a surge in violence, reversing a decision to allow the country to host matches three months earlier.
Iraq's national team has struggled to replicate their stunning success in the 2007 Asia Cup when they emerged triumphant, giving the country a rare national symbol as it was grappling with a brutal Sunni-Shiite sectarian war.
(For more sports news and updates, follow Ahram Online Sports on Twitter @AO_Sports and on Facebook at AhramOnlineSports)