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Manchester City have sacked manager Mark Hughes and appointed Roberto Mancini on a three-and-half year contract.

City released a statement confirming Hughes, who has lost just two games this season, has had his contract terminated.

Hughes spent more than £100 million pounds on players during the close season in a spending spree fuelled by the petro-dollars of billionaire owner Sheikh Mansour bin Zayed Al Nahyan in a bid to secure a Champions League place.

With the likes of Carlos Tevez, Emmanuel Adebayor, Roque Santa Cruz, Gareth Barry and Kolo Toure added to the squad, City were tipped as top-four contenders.

Even the dream of a first league title since 1968 seemed possible when they began the campaign with four consecutive wins, including a 4-2 home victory over Arsenal.

But a run of seven draws halted their early season momentum and Wednesday’s dismal 3-0 defeat at Tottenham Hotspur fuelled rumours that Mancini was being lined as the new manager.

City are currently sixth in the table.

Mancini, who made his name as a striker at Sampdoria, won three consecutive Serie A titles as coach of Inter Milan before being sacked at the end of the 2007-08 season.

Mancini was at Saturday’s Premier League game against Sunderland, which saw City beat Sunderland 4-3.

Hughes applauded all four sides of the stadium and looked grim-faced as he walked down the tunnel for the final time with his fate already sealed.

Chairman Khaldoon Al Mubarak said on the club’s website after the game: “Prior to the current season beginning, with significant investment in players and infrastructure in place, the consensus between the Board and coaching staff was that appropriate agreed targets should be set for the 2009/2010 season.

“The targets were agreed as a result of the player acquisition strategy of the club being radically accelerated in the summer as a result of very favourable conditions for any buying club. It was also based on the fact that the infrastructure of the club had been overhauled completely at great cost in order to create the best possible environment for the team.

“A return of two wins in 11 Premier League games is clearly not in line with the targets that were agreed and set. Sheikh Mansour and the Board felt that there was no evidence that the situation would fundamentally change. This is a particularly difficult announcement given the personal investment over the past 15 months on all sides and we would like to put on record our respect for and thanks to Mark Hughes and we wish him the best in his future career.”

Brian Kidd will join Mancini as assistant manager with Hughes’ backroom staff of Mark Bowen, Eddie Niedzwiecki, Kevin Hitchcock and Glyn Hodges also leaving the club.

“Roberto is a hugely experienced manager with a proven track record of winning trophies and championships. His experience and track record speak for themselves. What is absolutely clear is that Roberto believes in Manchester City’s potential to achieve at the highest level and importantly in his own ability to make this happen. My hope is that our incredible fans will join us in welcoming Roberto to the football club,” the statement finished.