David Moyes is a strong favourite to take over from Manuel Pellegrini after the Chilean was sacked as manager of West Ham in the aftermath of their embarrassing 2-1 home defeat by Leicester.

The former Everton manager has been lined up to return to the role he performed in similar circumstances during the 2017-18 season, with West Ham just one point above the relegation zone after four successive home defeats and just two wins in all competitions since late September. Pellegrini was informed of the decision to sack him despite holding his post-match press conference following the loss to an under-strength Leicester side featuring nine changes from their defeat to Liverpool on Boxing Day. West Ham left the pitch to a chorus of boos from the few home supporters that remained and the news that Pellegrini had been sacked was delivered less than 90 minutes after the final whistle.

“West Ham United can confirm that Manuel Pellegrini has left the club with immediate effect,” read a club statement. “Joint-Chairmen David Sullivan and David Gold, along with the Board and everyone at West Ham United, would like to place on record their thanks to Manuel for his service over the past 18 months.”

Sullivan added: “It is with great disappointment that we’ve had to make this decision. Manuel is a gentleman and it has been a real pleasure to work with someone of his calibre. However, it has become clear that a change is required to get the club back on track in line with our ambitions this season. We felt it was necessary to act now in order to give the new manager as much time as possible to try and achieve that goal.”

Having been allowed to leave at the end of his six-month contract in May 2018 after guiding West Ham away from trouble, Moyes is likely to demand a longer deal this time if he is to return. Chris Hughton, Tony Pulis and Bournemouth’s Eddie Howe understood to be among others under consideration, along with Enzo Maresca, Pellegrini’s Italian assistant.

Demarai Gray’s winner proved decisive as Leicester bounced back from defeat to Liverpool. Photograph: Holly Allison/TPI/Shutterstock

The Chilean – who was appointed as a replacement for Moyes and guided West Ham to 10th in his first season in charge – is likely to be followed out of the club by the sporting director, Mario Husillos. The first‑team coach, Kevin Keen, has been lined up to take charge for the crucial game against Bournemouth on New Year’s Day.

The 66-year-old had 18 months left on his contract and West Ham are expected to pay him up to £10m in compensation to seal his exit.

Asked after the Leicester defeat if he would still be in charge for Bournemouth’s visit to the London Stadium, the former Manchester City manager seemed resigned to his fate. “That’s a question I can’t answer,” he said. “It doesn’t depend on me. I must continue working the way we are doing and try to recover our trust in what we are doing.”

Pellegrini also admitted that the disastrous run of form that has seen West Ham slip from fifth place at the end of September into a relegation dogfight had been down to a lack of confidence among the players. “Without any doubt they lack confidence,” he said. “We know the players can perform better. The only way to do it is to have one clear idea, and not make changes. When we get a result here the players will have more confidence.

“The fans deserve better results and a better performance from the team so I understand their reaction completely. I must continue working. We need to find a way to recover our trust and win our next game.”

But that task will now fall to someone else.