Rangers insisted Mark Warburton left of his own accord on Friday night amid claims he was surprised by the club announcing his resignation.
The Scottish giants said they had granted the English manager his wish to leave Ibrox, following negotiations with his representatives.
Yet it was reported that Warburton was taken aback by the news, indicating he had received no warning of the 9pm statement detailing the end of his reign.
But Rangers stood by the announcement, meaning Warburton’s tenure was over.
In the lengthy statement, Rangers said they had been advised earlier this week, at a meeting with the management team’s representative, that Warburton, his assistant David Weir and the club’s head of recruitment Frank McParland “wished to resign their positions and leave the club on condition that Rangers agreed to waive its rights to substantial compensation”.
Rangers said their agreement to waive the compensation would “assist the management team to join another club”.
Warburton’s position had been under scrutiny due to poor results and the massive deficit to Premiership leaders Celtic, which now stands at 27 points.
He had been linked with a move to Nottingham Forest, but the Sky Bet Championship club on Thursday night handed caretaker Gary Brazil the reins until the end of the season.
Rangers said they had agreed to release the trio because it was “important that Rangers has a football management team that wants to be at the club”.
Under-20s coach Graeme Murty – a former Reading player and Scotland international – will take interim charge of the first team for Sunday’s William Hill Scottish Cup fifth-round tie against Morton.
Despite having seemingly had his intention to resign communicated to the board earlier this week, Warburton earlier on Friday spoke at his pre-match press conference, and gave a ringing endorsement to McParland following speculation the head of recruitment was poised to quit.
There was no indication at this point of the evening drama that lay ahead, and the waters were muddied further by reports that Warburton had denied standing down. BBC Scotland stated the Englishman was unaware of the club’s statement and was consulting his legal team.
The statement from Rangers explained events during a seemingly busy week, and stressed that “absolute commitment is essential”.
It read: “At a meeting with the management team’s representative earlier this week the club were advised that Mr Warburton, Mr Weir and Mr McParland wished to resign their positions and leave the club on condition that Rangers agreed to waive its rights to substantial compensation.
“Rangers’ agreement to waive compensation would assist the management team to join another club. This compensation amount was agreed when Rangers significantly improved Mr Warburton and Mr Weir’s financial arrangements before the start of this season.
“The board urgently convened to consider the offer made on behalf of the management team and its ramifications and agreed to accept it and release the trio from the burden of compensation, despite the potential financial cost to the club.
“It is important that Rangers has a football management team that wants to be at the club and that the board believes can take the club forward to meet our stated ambition to return to being the number one club in Scotland. We are clearly short of where we expected to be at this time.
“The representative acting for the management team subsequently attempted to alter the terms of what had been agreed in favour of the management team. A further board meeting was held this afternoon to discuss this and it was decided not to agree to this additional request but to hold with the original agreement.
“Mr Warburton, Mr Weir, and Mr McParland have therefore been notified in writing that their notices of termination have been accepted.
“The board is very appreciative of the good work previously done by the management team but believes it had no alternative. Our club must come first and absolute commitment is essential.”
Former Brentford boss Warburton was appointed Rangers manager in June 2015 on a three-year contract.
He led the club to promotion back to the Premiership in his first season at the helm, as well as triumphing in the Challenge Cup.
But Rangers have struggled to keep pace with their Old Firm rivals this term and currently sit third in the top-flight standings, having played a game more than second-placed Aberdeen.