Chelsea have parted company with manager Avram Grant after terminating his contract.

Grant's eight-month tenure has come to an end just three days after his side lost to Manchester United in the final of the Champions League.

The Chelsea manager also missed out on the Premier League by two points after his side took the Red Devils right to the wire on the last day of the season.

A statement from the club said: "Chelsea Football Club can confirm that Avram Grant has had his contract as manager terminated today (Saturday, May 24). This follows meetings over the last two days.

"Everybody at Chelsea FC would like to thank Avram for his contribution since taking over as manager last September.

"We will now be concentrating all our efforts on identifying a new manager for Chelsea and there will be no further comment until that appointment is made."

Grant, who replaced Jose Mourinho last September, was expected to be removed from his post following Chelsea's failure to win a trophy for the first time in three seasons.

He joined the club last summer from Portsmouth to take up the post of director of football.

Grant, who had never managed a club in England, was asked to takeover and later given a four-year contract.

But both chief-executive Peter Kenyon and chairman Bruce Buck paved the way for change by insisting that Chelsea's performance this season was simply "not good enough".

Buck said: "We have very high expectations at Chelsea and a couple of second place finishes is just not good enough for us - so although we never would have thought in September when Jose Mourinho left that we would be able to make it into a Champions League Final as we did - and that is fantastic - Chelsea are here to win trophies.

"So although it was an excellent season, we are still disappointed."

A series of discussions finally resolved Grant's future and it is understood the Israeli said his farewells to the players on Friday - telling them it had been a "privilege" to manage the team.

© Independent Television News Limited 2008. All rights reserved.