Stam, the former Manchester United defender and Netherlands global, was hired by the club prior to last season and took them to the Championship playoff final, which they lost to Huddersfield Town on penalties.
They play Queens Park Rangers in the first of their final eight games of the campaign.
Legal action against author of Sanjay Dutt's biography
What is interesting, Sanjay Dutt's life journey will soon be out in Rajkumar Hirani directorial biopic based on the actor. It's Wonderful to be working with Ajay and Lovel who bring years of experience and creativity to Bollywood ", he said.
Reading announced the decision on their website (www.readingfc.co.uk), saying majority shareholders Yongge Dai and Xiu Li Dai had deemed the change necessary after "careful consideration".
"Jaap has not wavered in the time, effort and sheer determination he has put in to try to steer the team away from the position we find ourselves in".
"We would like to thank Jaap for his hard work and commitment to the club, in particular noting what he achieved in a memorable first season in club management, and we wish him the very best of luck in his future endeavours".
Weinstein Company files for bankruptcy
The NDA pronouncement comes in the midst of a civil rights suit levied last month by New York Attorney General Eric T. The Weinstein Company knocked those statements down, calling them "an excuse".
The former Manchester United and Lazio centre-back, who earned 67 caps for the Netherlands, was appointed in the summer of 2016 after working as an assistant coach at Ajax.
Stam signed a two-year contract when he first arrived at the Madejski Stadium and that was extended by another 12 months in July last year after he guided them to the brink of the Premier League.
Reading will now focus on recruiting a replacement for Stam, with the club not returning to action until Friday, 30 March, following the worldwide break.
Young calls on Shaw to work hard and fight
I feel he can be one of the best in the world. "Obviously he is a player that wants to do well, I want to see him doing well". When at Southampton he looked like somebody who could go on and become a top player in the Premier League .