Steve Price has been replaced by assistant Paul McGregor as coach of the St George-Illawarra Dragons after a mixed start to the NRL season.

The Dragons announced Price's dismissal on Monday morning and McGregor left New South Wales's State of Origin camp to take over as interim coach immediately.

"As of this morning, Paul McGregor is the caretaker coach of the Dragons for the balance of the 2014 season," Dragons chief executive Peter Doust said in a video posted to the club's website.

"The board has decided, in not wishing to exercise (Price's) option for 2015, that we should make a change as soon as possible.

"Team performances, results have been unacceptable and we wanted to see and give this season as much of a chance as we could."

Despite returning to Wollongong, McGregor will fly to Brisbane to fulfil his role with the Blues on Wednesday night.

"The board wanted the change to be as simple as possible for the players and for their sake I agreed," McGregor said in a club statement.

Sorry, this video has expired Price gets the sack

"This is a difficult situation for me, Steve Price is a good friend of mine and we have worked closely together and I would have liked us to work through these tough times as one.

"This change will be a new challenge for the players to face but we have a good football team and good group of men."

After rattling off three wins to start the year, the Dragons have lost six of their last seven games to sit 13th on the ladder.

That stretch included a 36-0 drubbing by Parramatta in round 10, a 32-point loss to the Bulldogs a week earlier, and 20-point losses to the Roosters and Rabbitohs in rounds eight and five respectively.

Price failed to fill Bennett's boots

Bennett Price 3 ('09-'11) Years 3 ('12-'14*) 79 Games 52 51 Wins 22 27 Losses 34 65% Win% 39% * Only coached 10 games in 2014

Former assistant Price took over the reins for the start of the 2012 season when Wayne Bennett departed for Newcastle, having brought a long-sought premiership title to the joint venture in 2010.

Price was unable to bring similar success but Doust said he still had the club's ultimate respect.

"Steve Price is leaving with a great history at the club," he said.

"He's to be respected for his contribution in many, many ways. He's a guy of high integrity and we wish him well for the future.

"We will now embark on a serious program to search for a coach for 2015 and beyond."

The Dragons finished ninth in 2012 and 14th last year, meaning Price was under big pressure to succeed this year following some big-name signings including Josh Dugan and Gareth Widdop, with former Tigers star Benji Marshall also linking with the club a fortnight ago.

Forward Trent Merrin also spoke warmly of Price when informed of his impending departure in the Blues' camp in Brisbane.

"It's come as a surprise, and I am very sorry to hear it," said Merrin.

"I have worked with him for a long time and not only is he a coach, he is also a mate."

The only thing keeping the Dragons from sitting behind the Raiders in 14th are the two points they picked up via a bye on the weekend.

ABC/AAP