After a record of just eight wins from 39 games, the Heart have lost patience with Aloisi.
The former player was sacked after a lengthy board meeting on Saturday, two years into a three-year deal.
No club officials returned calls seeking confirmation of the sacking.
Aloisi presided over the worst record in the A-League and his tenure ended after 17 straight games without a win and one clean sheet in 19 games.
The last result, a 1-0 loss to fellow strugglers Wellington on Friday night, followed a 3-1 loss to Melbourne rivals Victory.
Aloisi won his first game in charge of the club on the opening weekend of the 2012/13 season with a 2-1 win over Victory, but struggled for consistency.
Without an interstate win through the league, Heart were well placed to contest the A-League finals but fell apart in the final month, losing their last five games of the season to finish 9th.
In 2013/14, Aloisi oversaw a major overhaul, with senior players Matt Thompson, Richard Garcia, Fred and Simon Colosimo all moved on.
Socceroo legend Harry Kewell was appointed club captain, while Orlando Engelaar, Patrick Kisnorbo and Michael Mifsud were brought in from European leagues.
For all that, they sit last on the A-League table with just four points from 12 games.