Former Newcastle and West Ham captain Nolan took charge of the Cobblers in December 2024 and kept them in League One.
However, Nolan has been dismissed after their 1-0 defeat against AFC Wimbledon which leaves them 23rd in the table.
"We are sorry to have to take this decision, but unfortunately as we all know, football is very results based," the club said.
"We will always be grateful to Kevin for his hard work here, he helped keep us up last season and we enjoyed a strong first half of this season but since Christmas the sequence of performances and results have led us to believe a change is in the best interests of all concerned.
"We are fortunate to have someone of Colin's experience, supported by Ian Sampson and the rest of the staff to look after matters on an interim basis.
"Kevin leaves with our thanks and our best wishes and we wish him well for the future."