Blackburn's chairman, Robert Coar, said after a 1-0 defeat at Aston Villa left the 1994-95 champions without a goal or a point so far this season. "Kenny and Blackburn Rovers have today decided he will be leaving by mutual agreement. We're obviously very appreciative of what he's done for the club."
He said his conversation with Dalglish had been brief. "We discussed the situation. It wasn't a particularly long conversation. It was 'thanks' on both sides and 'let's move on'.
"He had a changing role last years [from manager to director of football] which was of his choosing, and the situation has just run its course. His title was a 'let's see what happens' thing. It wasn't to work out for either side. Of course, I am sorry."
Dalglish, the 45-year-old who resigned as Liverpool manager in 1991 after a trophy-laden career at Anfield, was lured to Ewood Park in October that year by the prospect of using Jack Walker's millions to revive a club whose honours list dated largely from the previous century. After promotion the following spring, he led them to fourth and second place before winning the Premiership 18 months ago.
No sooner had he achieved Walker's goal than Dalglish stepped out of the limelight to become Blackburn's director of football. He was expected to prepare reports on the club's European Champions' League opponents, only to maintain an almost subterranean profile during their ill-starred campaign. Although he often took part in this year's close-season training, his precise role remained unclear.
Ray Harford, who stepped up from the coach's role when Dalglish moved "upstairs," confirmed the parting of ways. "We came as a package and working with Kenny were some of the best years of my life," the Blackburn manager said. "As the chairman says, it seems to have run its course, but it's been a wonderful adventure."
Coar reiterated his belief that Harford was "the right man for the job", but news of Dalglish's departure - barely a month after the sale of Alan Shearer - could hardly have been worst timed. Blackburn visit Manchester United on Sunday.
Meanwhile, the availability of Dalglish, who is on holiday in Spain, is likely to revive summer speculation linking him with Leeds United.
Both Rovers and Leeds were involved in player dealings yesterday. Blackburn may have been rebuffed in attempts to sign Gabriel Batistuta from Fiorentina or Pierluigi Casiraghi from Lazio as a replacement for Alan Shearer but at least Tim Sherwood agreed a three-year extension to his Rovers contract.
Thomas Brolin, noticeable by his absence from Elland Road despite Leeds' shortage of strikers, has joined FC Zurich on loan for the rest of the season. The Swedish international, signed for pounds 4.25m from Parma last November, failed to establish himself in the Leeds team, spending a large amount of time on the substitutes' bench.
Since the end of last season the 26-year-old, who has scored 26 goals in 46 internationals, has been trying to find a new club. He did not report for pre-season training and his squad number, 36, indicated how high, or low, he figured in the plans of Howard Wilkinson. "He wants to play football and the club prepared to give him first-team football is FC Zurich," the Leeds manager said.
Match report, page 25