Eustace led Birmingham to safety last season, while a come-from-behind 3-1 derby win over West Brom on Friday left Blues sixth in the Championship after 11 fixtures heading into the international break.
However, following Wayne Rooney's decision to step away from DC United, Birmingham decided to cut ties with Eustace, leaving a section of the club's fans unhappy over their treatment of the 43-year-old.
And less than 24 hours after making that decision to sack Eustace, the Midlands club have released a 789-word statement explaining their reasoning, claiming his ambitions and goals did not match the club's.
A letter from club CEO Garry Cook said: 'Yesterday morning I met with John Eustace in Birmingham and shared the reasons for the decision to part company. I thanked John for his hard work.
Birmingham have released a statement explaining their decisions for sacking John Eustace
A letter from Birmingham CEO Garry Cook to the fans explained why they cut ties with Eustace
'John had clear ambitions and goals for the season. Unfortunately, following a series of meetings over a number of months, it became clear that there was a misalignment with the leadership of the Club. When this happens, the best thing to do is to part company.'
Cook also explained how sacking Eustace now would allow his successor time to assess the squad and prepare for when the transfer window re-opens in January.
The statement continued: 'The timing of the decision allows the incoming manager sufficient time to evaluate the playing staff ahead of the January and summer transfer windows.'
Cook went on to acknowledge how the once Premier League side have struggled in the last 10 years but is planning to get the club back to the big time, saying: 'I do not expect our fans to agree with every decision we take.
'All I ask is that you keep in mind the Owner's and the Board's commitment to the long-term success of the Club and the desire to create a new and exciting future, the likes of which Birmingham and Birmingham City have never seen before.
'We cannot keep looking back and referring to what happened in the recent past, we must look forward – the future is bright and we are on the rise again.'
Cook met Eustace on Monday morning to inform him that his 15-month tenure was over.
Manchester United, Everton and England icon Rooney is now expected to take over.
The legendary striker is in talks with Birmingham's US owners and their chief executive Garry Cook who has close links to Rooney's agent Paul Stretford.
Rooney has previous Championship experience in charge of Derby County, who were destined for relegation when he took over after a points deduction.
Birmingham are enjoying a promising start to the season and currently sit sixth in the table
Wayne Rooney (pictured) terminated his contract with DC United by mutual agreement over the weekend and is now on the brink of succeeding Eustace at Birmingham
Mail Sport understands that the 37-year-old former Derby County boss — who wore a 'Once a Blue Always a Blue' T-shirt in the FA Youth Cup final in 2002 — could be installed at St Andrew's later this week.
Eustace's future now remains in doubt, but at the start of September the manager was thought to be an early candidate should Michael Beale be replaced at Rangers.
Eustace succeeded Lee Bowyer in July 2022 and helped Birmingham finish nine points above the drop zone in the second tier amid off-field issues surrounding the ownership of the club.
Despite just three defeats so far this season, it was reported over the weekend Eustace's position was under threat as the club's new American owners sought a big-name appointment.
BIRMINGHAM STATEMENT IN FULL
Yesterday morning I met with John Eustace in Birmingham and shared the reasons for the decision to part company. I thanked John for his hard work. I also told him that every Blues fan will be forever grateful for keeping the Club in the Sky Bet Championship last year. Tom Wagner expressed to him when they spoke later in the day that if we had been relegated, Knighthead would not have invested in Birmingham. John will be forever remembered for this fact. I speak for all at the Club when wishing him the very best for the future.
There is never a good time to make such a decision. You need to process all of the opinions and reach the best outcome for the future. Tom Wagner has been very clear with the ownership’s ambition for Birmingham City. It is to make the Club a beacon for sporting excellence and to proudly be at the centre of Birmingham’s community. There is a plan and every decision we take is with the Club's best interests at heart.
John had clear ambitions and goals for the season. Unfortunately, following a series of meetings over a number of months, it became clear that there was a misalignment with the leadership of the Club. When this happens, the best thing to do is to part company.
The timing of the decision allows the incoming manager sufficient time to evaluate the playing staff ahead of the January and summer transfer windows.
In a short period, the Owners, Board Members and Club leadership have overseen the start of a transformation that not even the most optimistic Blues fan would have considered possible. And this is just the beginning.
A tired and derelict St. Andrew’s is in the process of being transformed. We are investing and delivering a high-performance infrastructure to enable all of our teams to compete at the highest levels. By the end of the year, nearly 30,000 supporters will be back in the stadium. We have invested in Premier League quality pitches and facilities at St. Andrew's, EPIC and Wast Hills Training Ground. We are investing in our medical department and we are making important strides to improve the fan experience in hospitality, ticketing, and the Blues Store.
The recruitment of talent is vital. The team is now supported through data-enhanced decision making, with a player identification system in place enabling them to unearth hidden gems that strengthen the team and plan effectively for future transfer windows. In addition, we are increasing our investment in the Academy which is a cornerstone of the Club. This will ensure that we continue to attract and develop the best young players in our region.
We have built a facility at St. Andrew’s called The Alliance which enables us to showcase who we are to global brands interested in becoming our partner, driving much-needed revenue into the Club that will be reinvested. And we continue to improve the matchday experience by adding mobile kiosks so fans have easier access to pre-game and half-time refreshments. We know our supporters have long deserved more and we are committed to making additional changes.
The Owners and Board Members are ambitious. They are driven to help make Birmingham City a football powerhouse. It will not happen overnight. It is a step-by-step approach. We are well aware of what has happened at Blues over the past decade. We believe we have moved on from those dark days giving hope and aspiration to existing and new fans. Our intent is to be judged over what we do in the years to come and be ambitious with the new story that we are writing.
Creating a winning culture in an organisation that has been on its back foot for a number of years is not easy. My executive team are aware that we are aspiring to be world class, but it takes more than words. Birmingham City Football Club needs world-class professionals across every department, to enhance our performance on and off the pitch. Experienced people who know how to be successful and are driven by winning. We are not going to stop identifying and adding such talent to help us realise our ambition.
I do not expect our fans to agree with every decision we take. All I ask is that you keep in mind the Owner's and the Board's commitment to the long-term success of the Club and the desire to create a new and exciting future, the likes of which Birmingham and Birmingham City have never seen before. We cannot keep looking back and referring to what happened in the recent past, we must look forward – the future is bright and we are on the rise again.
Keep Right On,