Kevin Bond has accused Newcastle of failing to carry out a proper investigation before sacking him over allegations made against him by Panorama.
The club have confirmed that the assistant manager's contract has been terminated, but Bond vowed to fight to clear his name.
In a statement released through his solicitors, he said: 'I am extremely disappointed that Newcastle United Football Club has chosen to terminate my contract without carrying out any proper investigation into the allegations made against me in the Panorama programme.
'My lawyers will shortly be going to court to compel the BBC to release full transcripts of the recordings.
'Rather than waiting for this and the outcome of any FA investigation, NUFC have made their decision solely on the basis of a few sentences carefully selected and edited by Panorama.
'I intend to pursue all legal avenues to vindicate my reputation and restore my career and livelihood.'
Bond's departure was confirmed in a statement issued to the Stock Exchange by Newcastle this morning.
It read: 'Newcastle United has terminated Kevin Bond's contract. There is no further comment from the club.'
The former Portsmouth coach has always insisted he was innocent of any wrongdoing, but was placed on gardening leave by the Magpies earlier this month when it was revealed that he would be named in the programme.
Bond did not fly out to Estonia with the rest of the party for the UEFA Cup clash with Levadia Tallinn on September 14, and has been out of the picture ever since.
Manager Glenn Roeder has since been assisted in the dug-out by just Terry McDermott and Lee Clark following the earlier departure of Tommy Craig.
Bond is the first casualty of the Panorama investigation, which also levelled accusations at Bolton boss Sam Allardyce, Portsmouth counterpart Harry Redknapp and agent Peter Harrison among others. Like Bond, they have all protested their innocence.