Iniesta is in danger of being relegated for the first time in his glittering career, with big-spending Vissel rooted to the bottom of the Japan top flight more than halfway through the season with only 11 points from 18 matches.
Lotina was brought in to stop the rot in early April but the Spaniard has picked up only seven points from his nine league games in charge.
Japanese media reports said the veteran manager, whose CV includes relegations with five different teams in his home country, clashed with club officials over how best to use the 38-year-old Iniesta.
The 2010 World Cup-winning midfielder has started Vissel's last seven league games but Lotina has shifted the team's playing style away from a Barcelona-style "tiki-taka" passing game to a more counter-attacking approach.
Lotina also reportedly disagreed with the club over how much time Iniesta should spend on the pitch.
Iniesta cut a disconsolate figure in Vissel's 1-0 defeat to Urawa Reds on Sunday and trudged off the pitch with his head bowed when he was substituted in the 70th minute.
Reports say club officials are worried that Iniesta might leave if Vissel are relegated. He signed a two-year extension to his contract in May last year that reportedly takes him to the end of 2023.
Lotina has been replaced as manager by Takayuki Yoshida, who begins his third stint in charge of the club.
"It's precisely because we're in this tight spot that everyone at Vissel Kobe, starting with the fans and the sponsors, needs to band together and overcome this difficult situation," said the 45-year-old Yoshida.
Iniesta joined Vissel in 2018 after making more than 600 appearances for Barcelona, where he won the Champions League four times and lifted nine La Liga titles.
At Vissel Iniesta has lined up alongside German World Cup-winner Lukas Podolski and former Spain team-mate David Villa, and now plays with ex-Barcelona pair Bojan Krkic and Sergi Samper.
Iniesta has found success hard to come by in Japan, with an Emperor's Cup win in 2019 the only trophy he has managed to add to his massive collection.