The move brings to an end the short and tumultuous period in Japan for the 56-year-old Mexican, who was reportedly the country's highest-ever paid national coach on an estimated $2.45 million.
"We have reached the decision to terminate the contract with coach Aguirre at this time," Japan Football Association (JFA) president Kuniya Daini told a nationally televised press conference.
"We came to think that we must avoid risks, that these things will affect the World Cup Asia qualifiers."
Aguirre, who only signed on the dotted line last year, has been under a cloud since claims emerged that he had been involved in fixing results when he was manager of Spanish side Real Zaragoza.
He is due to appear in court this month in Valencia, Spain, to answer charges that he and 40 others rigged a 2011 league match, which saw Zaragoza defeat Levante 2-1 to avoid relegation.
Spanish prosecutors claim that Zaragoza paid a total of 965,000 euros ($1.4 million) into the bank accounts of certain coaches, staff and players who then gave the money to Levante's players as a "bribe".
Aguirre has denied wrongdoing, leaving the JFA squirming in embarrassment as the controversy overshadowed Japan's unsuccessful defence of its Asian Cup title in Australia.
Japan's shock exit on January 23, when it lost on penalties in the quarter-final to the United Arab Emirates, had compounded the calls for him to go.
Daini stressed that the JFA was not presuming Aguirre's guilt in a case that is still a long way from finished, but wanted to avoid any spillover onto team spirit.
"The decision is by no means a judgment on whether he had anything to do with the alleged match fixing," he said.
"What we had to think was how it could impact the Japanese national team," he said.
"We have highly appreciated coach Aguirre's skill as an instructor."
Daini added that the JFA did not want the continued investigation by Spanish authorities to interfere with Japan's campaign for the World Cup in Russia.
"We wanted coach Aguirre to focus his efforts on clearing his name," he stressed.
