The 58-year-old coach came under criticism for leaving Arjen Robben, Franck Ribery and Mats Hummels out of the starting XI.
Ancelotti, however, defended his tactics and selection for the clash, saying that although he would get the criticism, he felt that it was a good line-up for this game.
Following the defeat, CEO Karl-Heinz Rummenigge insisted that the performance was "not Bayern Munich" before adding that there was an immediate need for the club to discuss it.
And the German champions eventually decided to part ways with the former PSG and Real Madrid boss after just one full season in charge.
"The performance of the team since the start of the season did not meet the expectations we put to them.The game in Paris clearly showed that there had to be consequences. Sporting director Hasan Salihamidzic and I gave Carlo an open and serious talk today and informed him of our decision,' goal.com quoted Rummenigge as saying.
"I would like to thank Carlo for his cooperation and regret this development. Carlo is my friend and will remain so, but we had to make a professional decision based on Bayern's interests,''he added.
Rummenigge also called on Bayern Munich to have positive development and remain absolutely determined so that they could reach the planned goals for this season.
Bayern have now roped in Willy Sagnol as their interim coach. He will take the helm on a short-term basis, despite having limited experience in the role. (ANI)