Assistant coach Ryan Mason (31) will take over head coach duties with immediate effect while the club continues to look for a permanent manager alongside their search for a director of football following Fabio Paratici's resignation this month.
Stellini had replaced fellow Italian Antonio Conte last month with Spurs still in fourth place. The defeat at St James' Park leaves them six points behind Newcastle and Manchester United having played more games.
"Sunday's performance against Newcastle was wholly unacceptable. It was devastating to see," the club's chairman Daniel Levy said in a statement.
"We can look at many reasons why it happened and whilst myself, the Board, the coaches and players must all take collective responsibility, ultimately the responsibility is mine.
"Cristian stepped in at a difficult point in our season and I want to thank him for the professional manner in which he and his coaching staff have conducted themselves during such a challenging time."
It marks the second time Mason has become interim coach having taken the reins when the club parted ways with Jose Mourinho in April 2021.
Stellini was a member of Conte's managerial staff and the Italian had stepped in to lead the team when Conte missed a number of games due to gallbladder surgery.
In Conte's absence, Stellini guided Spurs to wins over Manchester City, West Ham United and Chelsea.
However, he was unable to recreate that success after replacing Conte, with Spurs winning only one game against Brighton & Hove Albion while Bournemouth snatched a last-gasp 3-2 away victory over them earlier this month.
Former Bayern Munich coach Julian Nagelsmann is the bookmakers' favourite to take over at Tottenham while Vincent Kompany, who has led Burnley back to the Premier League this season, is also in the running.
Feyenoord boss Arne Slot and former Leicester City manager Brendan Rodgers have also been linked with the job.
British media have reported that former Spurs boss Mauricio Pochettino, who led the club to the Champions League final in 2019, is in talks to take over London rivals Chelsea.
