The move was completed Thursday night when Johnson spoke during a conference call with Dodgers executives Bob Daly and Bob Graziano, according to a team source who spoke on condition he not be identified.
"This was an extremely difficult decision to make," Daly said. "Davey is a wonderful man with a wealth of knowledge and a proven track record. We all agreed this would be best for him and the ballclub. We decided to part amicably."
Johnson left for a fishing trip in Mexico after the Dodgers ended their season in San Diego last Sunday, missing the playoffs for the fourth straight year.
The 57-year-old Johnson guided the Dodgers to an 86-76 record and a second-place finish in the NL West this season. He is under contract for next year at a salary of $1.5 million.
The Dodgers were 77-85 in 1999 in Johnson's first season with the team.
"I am proud of the progress that we made," Johnson said, "and I am optimistic about this team's future."
Johnson himself had said he expected to be fired.
"There's a good future here, and I think things will be good here," he said after the season-finale. "I enjoyed being a Dodger."
Johnson's teams have finished first or second in 11 of his 12 full seasons as a big-league manager.
The Dodgers, whose $94.2 million payroll this season was the third-highest in baseball, haven't made the playoffs since 1996, and haven't won a postseason game since the 1988 World Series, when they beat the Oakland A's in five games.
Johnson becomes the fifth manager fired since last Sunday, when Philadelphia's Terry Francona was dismissed on the season's final day.
Cincinnati's Jack McKeon, Pittsburgh's Gene Lamont and Arizona's Buck Showalter were fired the following day.
The firing also means the Dodgers will have their fourth manager since Hall of Famer Tom Lasorda left midway through the 1996 season after a heart attack.
Bill Russell succeeded Lasorda, and was fired in June 1998 three months after the News Corp.'s Fox Group bought the Dodgers from the O'Malley family.
Glenn Hoffman, the Dodgers' third base coach this season, lasted until the end of the 1998 season, when he was told he would not return as manager.
Johnson, who guided the New York Mets to the 1986 World Series title, was hired three weeks later, after Montreal manager Felipe Alou chose to stay with the Expos.
Before Lasorda, who became Dodgers manager in 1977, Walter Alston, another Hall of Famer, held the job for the previous 23 years.
Johnson, who played second base for Baltimore, Atlanta, Philadelphia and the Chicago Cubs from 1965-78 and hit 43 homers fr the Braves in 1973, previously managed the Mets, Cincinnati Reds and Baltimore Orioles. His teams have a 1,148-888 record.
At season's end, Johnson ranked fourth among active big-league managers in wins, behind St. Louis' Tony LaRussa, Atlanta's Bobby Cox and the New York Yankees' Joe Torre.
The Dodgers, who finished 11 games behind the NL West champion San Francisco Giants, weren't eliminated from contention for the wild card spot until the season's final week, but it was clear long beforehand they weren't going to make the playoffs.
They won 11 of their final 15 games to reach 86 wins.
"I've been around long enough to know the difference between winning and losing is very small," Johnson said nearly two weeks before the season ended. "The Giants have six good starters. We fell short of that.
"That's the biggest thing, lack of consistency in the fourth and fifth starters."
Kevin Brown, Chan Ho Park and Darren Dreifort were a combined 43-25. Others who started were 11-26 with a 6.28 ERA, but even that's misleading since they were 7-25 with a 6.44 ERA before winning four of their final five decisions.
In addition, the Dodgers were one of baseball's poorest fielding teams.
"I'm paid to come in here and make this club win, and I didn't," Johnson said. "I feel bad we weren't able to take this thing down to the wire. Nobody feels worse than me. I understand, somebody's got to take the blame. I've got big shoulders."
Green, acquired from Toronto last November in the Raul Mondesi deal, had an especially disappointing season.
"I never felt locked in all year," said Green, who hit .269 with 24 homers and 99 RBIs, down from .309, 42 and 123 for the Blue Jays in 1999.
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