The decision comes after the resignation of predecessor Steve Kean at the end of September following relegation from the Premier League and months of angry protests from fans.
Supporters have long been venting their frustration at Blackburn's Indian owners Venky's although the team topped the second tier before Kean's exit.
Blackburn said on their website (www.rovers.co.uk) that Berg, assistant Eric Black, first-team coach Iain Brunskill and goalkeeping coach Bobby Mimms had all been fired.
"This decision has been taken following a very disappointing sequence of results," the statement read.
Venky's director Balaji Rao told the Times of India newspaper: "We have not been doing well and dropping points and losing matches quite often. I want to go up."
The 43-year-old Berg won the Premier League title as a Blackburn defender in 1995. The Norwegian had signed a three-year deal at Ewood Park.
However, he was axed after a 1-0 defeat at Middlesbrough on Wednesday, Blackburn's fifth loss in six games, leaving the club languishing in 17th place in the Championship. (Reporting by Alastair Himmer in Tokyo; Editing by Justin Palmer)