"This was a very difficult move to make, and we appreciate all of the work that Ned has done to develop this team into a contender," Brewers General Manager Doug Melvin said in a statement.
"In the end, this was a collaborative decision made to put our club in the best position for the final two weeks of the season."
After playing spectacular baseball in August, the Brewers have lost 11 of their last 14 games and seen their wild-card lead dwindle from 5 ½ games to a virtual tie with the Phillies.
The Brewers begin a three-game series with first-place Chicago Tuesday night at Wrigley Field.
Bench coach Ted Simmons has been reassigned to an advisotry role. Sveum has selected his best friend, Hall of Famer Robin Yount, to be his bench coach. Garth Iorg, who has been with the team the past few weeks, will coach third base.
