Urrutia announced the decision on Thursday at a joint press conference with Ziganda at the club's Lezama training ground ahead of Saturday's derby away to Deportivo Alaves, reports Xinhua news agency.
"This is a situation that makes us all sad, but the interests of the club are the most important thing and once we had taken the decision we thought it was best to announce it," said Urrutia, who commented he had worked with Ziganda for seven years as a player and a further seven as club president.
Ziganda replaced Ernesto Valverde in the summer after Valverde confirmed his move to FC Barcelona.
After six seasons coaching the Athletic B team and even helping them win a short-lived promotion to the Spanish second division, Ziganda was thought to be the logical replacement for the man who had steered the Basque club into Europe for the past four seasons.
However, the team has never been able to find a defined style of play or string together a consistent run of results and are currently in 14th place with just 43 points from 36 games.
Although Ziganda guided Athletic to the last 16 in the Europa League, they were well beaten over both legs by Olympique Marseilles and his position was weakened before Christmas by a humiliating Cup exit to third tier side Formentera, who won 1-0 in Athletic's San Mames Stadium.
"It's a sad moment, but as Josu said, the club is the most important thing and we have to put its well being ahead of our friendship," he said at the press conference.
Although injuries to key players, such as Iker Muniain, did not help Ziganda, perhaps his only real success this season has been the form of Inigo Cordoba and Unai Nunez, who have progressed from the B-team to become first team regulars.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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