The County manager, who guided them to promotion last season via the play-offs, was not alone in losing his job with a number of his coaching staff, including assistant Peter Ward, also part of a shock cull at Edgeley Park.
Gannon, 40, was told the news by administrators Leonard Curtis.
Almost the entire backroom staff at Edgeley Park have also been laid off and the club shop has been closed.
Gannon turned up at Edgeley Park last night where he was met by a demonstration from furious fans calling for his reinstatement as manager.
His record since taking over as County manager in December 2005 has been exceptional, saving them from relegation to the Conference in his first few months in charge.
But after the glory of Wembley success against Rochdale last May, off-the-field problems have spiralled downwards to the extent that County were deducted 10 points after being placed in administration.
Gannon, who made over 400 appearances for Stockport as a player, refused to speak to the media over the latter part of the season as a statement of his displeasure over the way the club was being run.
The administrators suggest that a takeover of the club could be imminent, but it appears that will come too late for Gannon and his staff.
Discussions
In a statement they said: "The administrators at Leonard Curtis are continuing ongoing discussions with a number of credible interested parties, and remain confident of progressing matters in the short term.
"It is regrettable that due to funding constraints during the administration period, it has been necessary to make a number of redundancies.
"Following the conclusion of the playing season, the number of coaching staff has been reduced and regrettably cuts include the manager, Jim Gannon. It is hoped that these cost reductions will enable us to preserve the club in the short term and secure a buyer in the near future."
Goalkeeper Owain Fon Williams admitted the County players are concerned about the future without Gannon.
The majority of the Hatters squad were brought to the club by the former manager.
"I don't know what happens next," admitted Fon Williams. "Tomorrow we may know more, but for the time being I don't know.
"I was in yesterday and everything was okay, none of this came up. They just said that I should come back in a week to see the physio and that was all.
"Jim has done very well in fairness. It was hard times for him, because in January we had to get rid of a couple of players and lost a couple of players on loan.
"It's going to be very strange going back there now.
Problems
"I don't know who is left, that's the thing. I have spoken to a couple of the lads and no-one seems to know what's going on."
Gannon joined County from Sheffield United in 1990 and went on to make 479 senior appearances, scoring 65 goals during a 10-year career at Edgeley Park.
Gannon's first managerial post was in charge of Dundalk in Ireland, before taking over as County, initially as caretaker boss.
He guided the club to safety on the final day of the season, then during the 2006/07 campaign led Stockport to a League record nine consecutive victories without conceding a goal.
County finished fourth in League Two last season, securing promotion with a 3-2 victory over Rochdale at Wembley.
County were fifth in League One this Christmas and boasted the best away record in the division.
But the departure of key players, enforced by financial problems, and a 10-point deduction saw them finish 18th.
Gannon was courted by Brighton in February, but turned down a move in favour of remaining with the Hatters.
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Showing comments 1 to 13 and replies | View All
bru50, stockport (07/05/2009 at 11:03)
Todd, heywood (07/05/2009 at 11:13)
Todd, heywood (07/05/2009 at 11:28)
STOCKPORT BLUE, On Cloud Nine (07/05/2009 at 11:36)
How could anyone let the club get into this mess.
A year ago it was wembley and success now its Gannon / Ward out and dire straits.
Where's all the money gone ?
Somebody is making out of this you can be sure and of course it's the poor bloody supporters who get shafted once again.
The administrators are talking short term but what use is that when come july there may be no club to administrate?
The manager/players and supporters have been shafted good and proper but there could be a light at the end of the tunnel if Manchester City were to buy the club, clear the debts and get some quality into the club.
If not I fear the worse and there could soon be houses where our club used to be.
STOCKPORT BLUE.
Prestwich Red, Prestwich (07/05/2009 at 12:21)
bru50, stockport (07/05/2009 at 13:21)
Clive Farrington (07/05/2009 at 13:27)
Mullet Vision (07/05/2009 at 15:11)
Ferrari, Toulouse (07/05/2009 at 18:00)
bluephil, Stoke-on-Trent (07/05/2009 at 20:56)
Todd, heywood (12/05/2009 at 18:25)
Mullet Vision (12/05/2009 at 22:16)
peter birch (30/05/2009 at 00:48)