Former Livingston, Morton, Coventry City, Hibernian and Dundee centre-half McPake began his managerial career with the latter, leading the Dens Park outfit to the Premiership during his three years in charge.
The 40-year-old led the Pars to a sixth-place finish after their first season back in the second tier, but they currently lie three points behind Hamilton Academical, although nine points clear of bottom side Airdrieonians.
Dunfermline say the decision to sack McPake was made by the current board but having “made the prospective investor in the club aware” of their intentions.
German football investment group Fussball GmbH put the Fife club up for sale in August.
Meanwhile, current under-18 and reserve team coach John McLaughlan has been asked to prepare the team ahead of Friday’s visit of Championship leaders.
The Dunfermline decision means both Fife clubs in the Championship are seeking a new manager after Neill Collins left Rovers on Saturday to take charge of Sacramento Republic in the USL Championship after only three months at Stark’s Park.