Malaga have sacked head coach Victor Sanchez for disciplinary reasons after an explicit video was posted online.
The club, currently 16th in Spain's Segunda Division, announced earlier in the week that they had suspended the 43-year-old.
Sanchez has said the matter is being dealt with by police and claims he has been blackmailed in relation to the video.
In a statement released on Saturday night, Malaga explained that they had not been able to resolve the situation with Sanchez.
"MCF has used best endeavours to attempt to resolve the situation amicably through intense negotiations with Victor Sanchez del Amo," the statement read.
"However, despite the ongoing and incessant efforts undertaken by the club, it has not been possible to reach a friendly separation.
"As such, MCF has made the decision to dismiss Victor Sanchez del Amo due to disciplinary reasons, in accordance with the applicable regulations.
"MCF has made the decision, taking into account the serious damage caused to the institution by the recent events, aiming to minimise the impact on the team and the entire MCF organisation."
Sanchez, who played for Real Madrid and Deportivo La Coruna during his playing career and took over at La Rosaleda in April 2019, released a statement on Twitter earlier in the week.
He said: "I want to report that I am the subject of a crime against my privacy with harassment and extortion.
"The matter is in the hands of the police and I entrust myself to follow their instructions.
"Sharing or disseminating intimate content of any person without consent is also a crime, whether via social media or in any other way.
"Thank you for your understanding and support."
Malaga have placed B-team coach Sergio Pellicer in charge until they name a replacement for Sanchez.