The team announced the decision one day after the Texans lost their 11th straight game, 27-20 at Jacksonville, a stunning fall for a team that expected to make a Super Bowl run. Houston (2-11) played miserably and was flagged 14 times for a franchise-record 177 yards.
The 52-year-old Kubiak was hired in 2006 and led the team to back-to-back AFC South titles in 2011-2012, the highlights of his eight-year tenure.
The Texans said they couldn't wait any longer to start turning things around.
"What's taken place with this organization is unacceptable," general manager Rick Smith said. "We've got three weeks of an evaluation process left and we've got to right the ship."
Kubiak's overall record is 61-64, with a 2-2 mark in the playoffs. Owner Bob McNair said the decision to let him go was a hard one.
"It was difficult for me because I think so much of Gary," McNair said. "We're here to have a winning culture and this year has not contributed to that."
The Texans said defensive coordinator Wade Phillips would serve as interim coach for the rest of the season.
Kubiak suffered a mini-stroke Nov. 3 in a frightening scene, collapsing at halftime during a game against the Colts and being rushed to a Houston hospital. He had returned to the sidelines, but the Texans have been unable to rebound from injuries to top players including quarterback Matt Schaub and running back Arian Foster.
The team later said Kubiak suffered a transient ischemic attack, or TIA, which occurs when blood flow to the brain is briefly interrupted, typically by a blood clot or narrowed blood vessels. Experts say they are often a warning sign for a future stroke, particularly within three months of a TIA.
The workaholic coach said he has learned through this ordeal he must take the advice of others and slow down some.
Kubiak, a former NFL quarterback who calls the team's plays, has long been known as a top offensive coach, mentoring quarterbacks in Denver under Mike Shanahan and then Schaub and Case Keenum in Houston.
He was hired in 2006, along with Smith, after the Texans finished a franchise-worst 2-14. Smith spent 10 years with Kubiak while the coach was offensive coordinator of the Broncos. Smith was Denver's defensive assistant for four seasons before moving into the front office for his last six years with the Broncos.
The pair helped transform the Texans, which began play in 2002, from league laughingstock to contender. The team went 6-10 in their first year and 8-8 in each of the next two seasons. Expectations were high in 2010 after Houston finished at 9-7 for its first winning record in 2009. The Texans instead fell to 6-10, which led to many fans calling for Kubiak's firing.
His original contract was due to expire after the 2010 season, but McNair defended him several times amid the bumps.
Last year, the Texans announced contract extensions for both Smith and Kubiak, rewarding them for taking the team to the playoffs last year for the first time. Kubiak's three-year agreement has him under contract through 2014.
McNair said at the time he offered Kubiak a four-year deal, but the coach preferred to make it for three.
Kubiak made his mark as Denver's offensive coordinator under Shanahan, winning two Super Bowls. An eighth-round pick out of Texas A&M, he spent nine years as John Elway's backup. He finished his career 4-1 as a starter, all in emergency relief of Elway.
Other recent departures from the Texans include assistant head coach Alex Gibbs (for Seattle) and offensive coordinator Kyle Shanahan went to join his father in Washington.
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