The former Everton assistant manager, 51, led North End into the play-offs last season despite operating with one of the smallest budgets in the division but has been sacked after Monday's 1-0 defeat at Sheffield United saw them slip down to 16th place in the Championship table.
"The decision was not taken lightly. Alan did an extremely good job in keeping us in the Championship and took us to the play-offs last season," chairman Derek Shaw told the club's official website.
"However, after a good start to the 2009-10 campaign we have only picked up seven points from a possible 30 since our last away victory against Sheffield Wednesday on October 20.
"In that period we have only scored six goals and that sort of record is not something we could allow to continue without addressing it."
The Lilywhites face Colchester United in the third round of the FA Cup on Saturday and Shaw hopes to have named an interim replacement by then.
"We will make further comment and announce who is in charge for the weekend's FA Cup tie later this week," he added.