Everton have ended Sam Allardyce’s miserable six-month spell as manager and have made contact with Marco Silva’s representatives after identifying the Portuguese as their choice to replace him.

In a day of major change at Goodison Park, Marcel Brands was appointed director of football to replace Steve Walsh, who has also left the club.

Allardyce met Farhad Moshiri, Everton’s major shareholder, at 8.30am on Wednesday in London and was told in a brief discussion that he did not feature in the club’s long-term plans. The 63-year-old had another year remaining on the 18-month contract he signed when succeeding Ronald Koeman last November and, as he obtained a deal with no break clause, he is expected to leave with a £6m payoff. He will have made around £9m for six months’ work.

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The former England manager, sacked by Everton on the day he could have been announcing the country’s World Cup squad, guided the team from 13th to eighth in the Premier League following a turbulent start to the season under Koeman and then the caretaker manager, David Unsworth. His managerial style never endeared him to Everton supporters, however, and there was mounting hostility towards Allardyce over the final months of the season.

“On behalf of the chairman, board of directors and Mr Moshiri, I’d like to thank Sam for the job he has done at Everton over the last seven months,” read a statement from the club’s soon-to-be new chief executive, Professor Denise Barrett-Baxendale. “Sam was brought in at a challenging time last season to provide us with some stability and we are grateful to him for doing that.

“However, we have made the decision that, as part of our longer-term plan, we will be appointing a new manager this summer and will be commencing this process immediately. Again, we’d like to place on record our sincere thanks to Sam for his work with us over the last few months and wish him well for the future.”

Allardyce’s backroom team of Sammy Lee, Craig Shakespeare and the goalkeeping coach Martyn Margetson have also left as the club undertakes another expensive overhaul of its management structure. The next manager will be the third appointed by Moshiri since he acquired a 49.9% stake in Everton February 2016 with Roberto Martínez, a manager he inherited, Koeman and Allardyce also departing with lucrative payoffs for their poor performances.

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Brands, technical director at PSV Eindhoven since 2010, has been confirmed as the new director of football, with Walsh paying the price for a disastrous recruitment policy. Everton have coveted the 56-year-old Brands since last summer, with his work in identifying young talent and helping PSV to the Dutch title three times in the past four seasons making him a target for several Premier League clubs.

“We need to be competing for honours against the Premier League elite,” said Brands. “It is no straightforward challenge but this must be our motivation each and every day. It is only a challenge such as this which could have persuaded me to leave PSV.”

Barrett-Baxendale confirmed that Walsh, who arrived from Leicester in July 2016, had left Everton. She said: “On behalf of the board and Mr Moshiri I’d also like to express our thanks to Steve Walsh.”

Moshiri’s first choice to replace Allardyce is former Hull and Watford manager Silva, who was sacked by the Vicarage Road club in January after a dramatic downturn in results. That followed what Watford claimed was an “unwarranted approach” by Everton that affected the focus and results of the Portuguese coach.

Watford have made a complaint to the Premier League over Everton’s alleged illegal approach and talks over a compensation package between the clubs have failed to reach an agreement. While Silva is out of contract and technically available to replace Allardyce, the dispute over Everton’s approach complicates that process and could lead to arbitration.

Everton officials are expected to reopen talks with their Watford counterparts this week in an attempt to resolve the matter and have already opened discussions with Silva’s representatives as they attempt to make a swift appointment.