City have released a statement confirming Hughes, who has lost just two games this season, has had his contract terminated.
Former Inter Milan coach Mancini was at Saturday's Premier League game against Sunderland, which saw City beat Sunderland 4-3.
In giving reason for the termination, City chairman Khaldoon Al Mubarak told the club's official website: "Prior to the current season beginning, with significant investment in players and infrastructure in place, the consensus between the Board and coaching staff was that appropriate agreed targets should be set for the 2009/2010 season.
"The targets were agreed as a result of the player acquisition strategy of the club being radically accelerated in the summer as a result of very favourable conditions for any buying club. It was also based on the fact that the infrastructure of the club had been overhauled completely at great cost in order to create the best possible environment for the team.
"A return of two wins in 11 Premier League games is clearly not in line with the targets that were agreed and set. Sheikh Mansour and the Board felt that there was no evidence that the situation would fundamentally change. This is a particularly difficult announcement given the personal investment over the past 15 months on all sides and we would like to put on record our respect for and thanks to Mark Hughes and we wish him the best in his future career."
"Manchester City Football Club can confirm the appointment, with immediate effect on a permanent contract, of Roberto Mancini and are also pleased to announce that Brian Kidd will join Roberto as assistant manager."
"Roberto is a hugely experienced manager with a proven track record of winning trophies and championships. His experience and track record speak for themselves. What is absolutely clear is that Roberto believes in Manchester City's potential to achieve at the highest level and importantly in his own ability to make this happen. My hope is that our incredible fans will join us in welcoming Roberto to the football club."
Al Mubarak has acted quickly to enable Mancini to invest in next month's transfer window and has awarded him a long contract rather than a short-term deal to the end of the season.
The club confirmed that Mark Bowen, Eddie Niedzwiecki, Kevin Hitchcock and Glyn Hodges have also left and further appointments will be announced in due course.
I say it is too early to sack Hughes. He just got 6 months in the job and lost just two games this season. Manchester City board must understand apart investing on new bloods into the squad, you also can't build clubs in short period or just one transfer window. Manager needs time to stick the team together.
