Manchester United ended Ole Gunnar Solskjaer's three-year reign as manager at Old Trafford on Sunday, but plan to wait until the end of the season to name the Norwegian's permanent successor.

Saturday's 4-1 embarrassment at the hands of struggling Watford was the final straw for the United board, who had stuck by Solskjaer in recent weeks despite humiliating home defeats to Liverpool and Manchester City.

Former midfielder Michael Carrick, who was part of Solskjaer's coaching team, will take charge of the forthcoming games while the club look to appoint an interim manager till the end of the season.

"Ole will always be a legend at Manchester United and it is with regret that we have reached this difficult decision," the club said in a statement.

"While the past few weeks have been disappointing, they should not obscure all the work he has done over the past three years to rebuild the foundations for long-term success."

Manchester United sacked Ole Gunnar Solskjaer on Sunday
Manchester United sacked Ole Gunnar Solskjaer on Sunday AFP / Ian KINGTON

Solskjaer leaves with United already realistically out of the Premier League title race, 12 points behind leaders Chelsea down in eighth in the table, and having exited the League Cup.

"This club means everything to me and together we're a good match, but unfortunately I couldn't get the results we needed and it's time for me to step aside," said Solskjaer.

"You know what this club means to me and what I wanted to achieve here. For the club, for the fans, for the players, for the staff, I wanted us to take the next step to challenge for the league, to win trophies."

Carrick's first game in charge will be a crucial Champions League trip to Villarreal on Tuesday.

Another defeat in Spain could leave the Red Devils needing both results in the final round of matches in Group F to go their way to avoid crashing out at the group stage for a second consecutive season.

"Ole couldn't get a performance out of them in the end. The players look drained of confidence and I'm not surprised today," said Gary Neville, former United captain and teammate of Solskjaer.

Manchester United have struggled despite resigning Cristiano Ronaldo from Juventus
Manchester United have struggled despite resigning Cristiano Ronaldo from Juventus AFP / Oli SCARFF

"They need to get the next appointment right and that'll probably be at the end of the season.

"They haven't planned for this, they haven't prepared for it. It's deteriorated so badly and so quickly."

A run of five defeats in Solskjaer's final seven league games contrasts sharply with the anticipation that surrounded the club in August when Cristiano Ronaldo made a surprise return to Old Trafford in the final days of the transfer window.

United handed Solskjaer a new three-year contract in July and also spent over ?100 million ($134 million) on Jadon Sancho and Raphael Varane as they looked to build on finishing second in the league to Manchester City last season.

However, Solskjaer was unable to assemble the pieces of his star-studded squad into a collective unit despite Ronaldo's return of nine goals in 14 games.

Solskjaer had ridden out storms before in a rollercoaster, but ultimately, trophyless three years.

However, even his credit as a club legend for scoring the winning goal in the 1999 Champions League final to win a historic treble for Alex Ferguson's side was fading as he was booed by the travelling support at Vicarage Road.

"You signed me for the best club in the world and gave me the biggest honour in football," tweeted United captain Harry Maguire. "Thank you for everything boss. Legend."

Zinedine Zidane, who won three Champions League titles with Ronaldo and Varane at Real Madrid, Leicester manager Brendan Rodgers and Ajax boss Erik ten Hag have all been tipped to succeed Solskjaer.

But the decision to wait until the summer to make a permanent appointment could open up a wider pool of potential candidates, including Paris Saint-Germain boss Mauricio Pochettino, who has previously been linked with the job.