The decisions not to renew the two men's contracts, taken less than a week after the signing of David Beckham from Manchester United, were accompanied by media reports that Real were targeting United's assistant manager Carlos Queiroz to succeed Del Bosque.
"The board of directors made a unanimous decision not to renew Vicente del Bosque's contract as the first team coach of Real Madrid," club spokesman Enrique Sanchez told a news conference at the Bernabeu on Monday.
"They considered that the team needs a change in its sporting planning and criteria in accordance with more modern methods."
Real's sporting director Jorge Valdano then announced that the 35-year-old Hierro would be leaving the club after 14 years during which he won three European Cups and six league titles.
"Hierro is nearing the top age limit and we believe it's the right moment to break our relationship, with all the love and respect he is due."
Valdano added: "It hasn't been an easy day. Two people who have been standard bearers for the club have gone. But we believed that it was time for a change in direction before things stagnate at the club.
It had been widely predicted that the club would offer to renew Hierro's contract for at least a season.
SEARCH HAS BEGUN
Sanchez added that the search for a new coach, led by Valdano, had already begun.
One of the first names mentioned by the Spanish media was Queiroz, the Portuguese coach who is credited with discovering Real forward Luis Figo.
Queiroz knows Beckham well from his time at Manchester United and would help the England captain Beckham settle in at the club.
Valdano justified the decision to replace Del Bosque as a way of ensuring his reign would not reach a "decadent" end.
Del Bosque in turn accused Real of a lack of straight talking.
"A lot of abstract words have been used to explain my dismissal," Del Bosque told Spanish radio Cadena Ser.
"It's been called the end of a cycle at the club but they're just empty words."
Del Bosque took charge of Real Madrid after the sacking of John Toshack in November 1999.
In less than four seasons in charge he steered the club to two European Cups, two domestic league titles, a European Super Cup, a Spanish Super Cup and a World Club Cup.
In recent weeks practically all the club's leading players expressed their hope that Del Bosque would continue in charge of the team.
"I think he is the prefect coach for Real," midfielder Zinedine Zidane said. "For him football is everything, but he always approaches his work very calmly."
The quietly spoken Del Bosque is renowned for his unassuming character and loyalty to the club he has served as both player and coach for 30 years.
The players' decision not to return to the pitch for a second lap of honour to celebrate winning the league title at the Bernabeu on Sunday is believed have been a protest at the club's expected decision not to renew Del Bosque's contract.
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