Dutt, who joined the north German first division club last year as its chief coach, has been blamed for the team's fall to the bottom of the Bundesliga table after losing all nine matches played.
Werder Bremen termed the team's campaign without a single win and its landing at the 18th place as the "worst start in a Bundesliga season" in the club's history.
The final push for Mr.Dutt's removal could have come from his team's 0-1 defeat to FC Cologne on Friday.
"Mr. Dutt and his team worked with passion in the past months to lead the team through a difficult phase," manager of the club Thomas Eichin said on Saturday.
"However, after the last results, the management is convinced that the team needs a new impulse to come out of its present situation," he said in a press statement.
Along with Dutt, his assistant coach Damir Burich was also removed from his post with immediate effect, the statement said.
The club announced that Dutt, 49, will be succeeded by the Under-23 team coach Viktor Skripnik. Dutt is the third Bundesliga coach to lose his job in the new season.
Schalke 04 chief coach Jens Keller and his Hamburg SV counterpart Mirko Slomka were dismissed earlier, also due to poor start of their teams.
Dutt took over the top Bundesliga job from Thomas Schaaf, who had led Werder Bremen to a Bundesliga and German Cup double in 2004 and two more German Cup triumphs during a 14-year term.
Before joining Werder Bremen, Dutt had served as the sporting director of the German Football Association (DFB).
His career as a football coach began in 1995 with a regional football team and since then he had coached second division team Stuttgarter Kickers as well as the first division clubs SC Freiburg and Bayer Leverkusen.
Image: Robin Dutt
Photograph: Michaela Rehle/Reuters
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