In a statement on Wednesday, the club said: “Valencia Football Club have today parted company with Gary Neville as Head Coach.
“After careful consideration, the Club have decided to make a change with the best interests of the Valencia CF moving forward this season. We thank Gary for his work at Valencia and wish him the best in the future.
“The Club have, today, appointed Pako Ayestaran as Head Coach until the end of the season.”
Ayestaran was the assistant coach at the club from 2001 to 2004, and helped the team clinch two La Liga titles and a UEFA Cup trophy.
From 2004 to 2007, when he was an assistant coach at Liverpool FC, the English club won the 2004/2005 UEFA Champions League, as well as the 2006 FA Cup Final.
As head coach, Ayestarán was Champion in Maccabi Tel Aviv, winning one league and two Cups.