Cincinnati bench coach Freddie Benavides will serve as interim manager.
"David provided the kind of steadiness that we needed in our clubhouse over the last few seasons," Reds president of baseball operations Nick Krall said.
"We felt a change was needed to move the major league team forward. We have not achieved the success we expected, and we need to begin focusing on 2025."
Bell had signed a three-year extension with the club in July 2023, a deal that was supposed to keep him in Cincinnati through the 2026 campaign.
In six seasons managing the Reds (2019-24), Bell led the team to a 409-456 record. Cincinnati made the playoffs once during Bell's tenure - during the COVID-shortened 2020 season.
The Reds are 76-81 and have already been eliminated from postseason contention. They are set to open a two-game series with the host Cleveland Guardians on Tuesday.