"Lee Carsley, who is well respected on the coaching staff and in temporary coach, is priced at 5/1". He had been in charge at St Andrew's for only 13 matches.
The 70-year-old took charge of the club with three games remaining last term, winning the final two to avoid relegation from the Championship on the final day.
Saturday's 3-1 home loss to Preston was the final straw and Redknapp finds himself out of work once again.
"The club has tonight parted company with manager Harry Redknapp", Birmingham said in a statement on their website.
The one time candidate for the England manager's job leaves the former Premier League club second bottom of the Championship with only Bolton Wanderers below them.
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After guiding the team to survival last season, the former Tottenham manager brought 14 players into the club in the Transfer Window, but has not seen results improve.
We thank him for all his efforts and wish him good luck for the future.
Speaking after the Preston game, which saw Daniel Johnson, Jordan Hugill and Tom Barkhuizen reply to Maxime Colin's opener, Redknapp insisted he was still up for the fight. "There is a team waiting to gel but we have suffered several injuries to key players", he said.
Following a miserable opening to this campaign, they lie second from bottom of the table after losing six of their opening eight games.
Carsley, 43, who was previously head coach at Brentford on an interim basis in 2015, steps up from the role of development squad manager at Birmingham.