Reports in The Mirror claim Liverpool manager was sacked tonight, after the club board came to the decision he had lost the dressing room.
Newspapers have been rife with rumours recently suggesting the club's biggest stars, Fernando Torres and Steven Gerrard are disullioned with Benitez' handling of club affairs with some suggestions they may leave if Rafa stayed.
The writing was on the wall earlier this week with claims that Benitez had been informed he had a miserly transfer budget to turn around the fortunes of last season's major Premier League under achievers. Then earlier today came reports that Liverpool were negotiating his release with a £3m offer for him to quit.
It has been claimed Benitez was hanging on only to negotiate his payoff. He has a £16million clause in his contract that must be paid in full if he is dismissed, and the only detail left to be finalised appears to be how much of that money he would receive.
Other rumours and newspaper reports suggest the Spanish coach could walk straight into another job after his dismissal at Anfield, with Inter Milan keen to make him the replacement for treble-winning manager Jose Mourinho.
Liverpool are said to have already drawn up a short-list of possible replacements for Benitez, with the highly respected Roy Hodgson among the top candidates.
It is understood that the new manager will be given money to spend, with around £20million set aside for new players and a guarantee that any money from sales will be used for recruitment.
Albert Riera, Ryan Babel, Alberto Aquilani and Benayoun are suggested names that could raise £25m or so, and several fringe players likely to be moved on could see the transfer kitty reach as much as £50m.
Roy Hodgson has been the bookmaker's favourite since his exploits in the Europa Cup, with Paddy Power offering odds of 13/8 for the last two weeks. His calm, respectful managerial style will fit well with the traditionalists within the historic club.
Tonight's announcement will see a serious shake up in the betting for the next Liverpool manager and most major firms will introduce odds by Thursday morning.
Expect to see Martin O'Neill and Gus Hiddink competing with Hodgson at the head of the market.