Manchester United captain Roy Keane was sacked by the club on Friday, according to media reports in Ireland.
Earlier, United's website said the controversial 34-year-old midfielder left by mutual consent but Tony O'Donoghue, sports editor for Irish state broadcaster RTE, says he was dismissed.
"Although they are calling it mutual consent, Roy Keane has been sacked," O'Donoghue told RTE's website.
O'Donoghue said Keane, who has been out of action since September because of a broken foot, turned up to play in a reserve game on Thursday night and was told there was no place for him in the side and he would have to contact Ferguson.
"As you can imagine Roy was not too pleased with this," said O'Donoghue.
The United manager then told Keane he needed to get his agent involved in the discussions.
According to O'Donoghue, the decision to sack Keane was taken after a meeting on Friday morning between Michael Kennedy, Keane's solicitor, and other United representatives.
The combative midfielder joined United in 1993 from Nottingham Forest for a then British record fee of 3.75 million pounds ($6.43 million) and has been the lynchpin of Britain's most famous club for a decade.
He helped United win the Premier League seven times as well as the league and FA Cup double in 1994, 1996 and 1999 when United also won the European Cup.
He was the on-field mirror image of Ferguson -- tough, uncompromising and interested only in winning -- and the Irishman's departure after 326 league games for United signals the end of the most successful era at Old Trafford.
Keane criticised team mates for lack of effort against Middlesbrough in a club TV interview which was never shown, and earned a public rebuke from Ferguson.
On Friday, Ferguson said Keane has been a "fantastic" servant for the club.
"The best midfield player in the world of his generation, he is already one of the great figures in our club's illustrious history," Ferguson said.
"Roy has been central to the success of the club in the last 12 and a half years and everyone at Old Trafford wishes him well in the rest of his career and beyond."
United achieved a treble in 1999, including the club's second European Cup, but, having been instrumental in leading them to the Champions League final in Barcelona, Keane missed the dramatic 2-1 win over Bayern Munich through suspension.
In September, Keane said he was likely to leave at the end of the season when his United contract ran out. Media reports say United have been actively pursuing Bayern Munich playmaker Michael Ballack to take Keane's place.
"The agreement allows Roy to sign a long-term deal with another club to enable him to secure his playing career beyond what would have been the end of his contract at United in the summer," United said on Friday.
Keane said: "It has been a great honour and privilege for me to play for Manchester United for over 12 years.
"During my time at the club I have been fortunate to play alongside some of the best players in the game and in front of the best supporters in the world.
"At all times, I have endeavoured to do my best for the management and the team. While it is a sad day for me to leave such a great club and manager I believe that the time has now come for me to move on.
"After so many years I will miss everyone at the club. I send my best wishes for the future to the management, players, staff and supporters of the club."
Though he could agree to join another club and was sent a clear welcome signal from Celtic on Friday, Keane cannot play for another team until the January transfer window.
Article 6 of FIFA's transfer regulations only allows players to move outside transfer periods if their contract expired before the end of the previous transfer window -- which in Keane's case would have been August.
"Roy Keane was a magnificent player and servant for Manchester United but he also knows all about Celtic," the Scottish club said in a website statement.
"If at any time Roy would like to speak to us about his future and Celtic's, we would be only too happy to speak to him. But as yet there have been no discussions."
Bookmaker Ladbrokes gave odds of 4-6 ON that Keane would play his next competitive match for Celtic. It also sliced its odds on him succeeding Brian Kerr as the next Ireland manager to 7-1 from 25-1 earlier on Fridayafter a flurry of bets.
Ireland's Keane bowed out of international football last month with 66 caps, two days after the country's World Cup hopes ended in a match the injured player could only watch.