Allardyce and the FA mutually agreed to terminate his £3m a year contract after he was secretly filmed by newspaper reporters discussing how to break rules on the banned practise of third-party ownership of players.
The 61-year-old also discussed a £400,000 "keynote speaker" deal — but stressed he would have to check with the FA first — and made disparaging comments about predecessor Roy Hodgson and his assistant Gary Neville.
After being appointed Allardyce had described the England manager's job was one he had waited for "for many, many years".
His consolation for losing his dream job is a seven-figure pay-off, according to the Daily Mail, yet that still represents only a fraction of the £6m he was due to earn from leading the Three Lions to the 2018 World Cup in Russia.
"Sam is absolutely distraught," said FA chief executive Martin Glenn in a statement. "He recognises that he made a terrible error of judgement and I think that he recognises as well that, whilst it's a tough decision that The FA is taking, he can see that at least we have a point.
"I know personally that he is deeply, deeply upset and deeply regrets the error of judgement but I also think that he understands why the FA has had to take this tough decision."