His dismissal followed a 1-1 draw with Nantes over the weekend and left some observers baffled.
Sage had rapidly become a fans' favourite after guiding Lyon from the bottom of the standings to a sixth-place finish last season.
And after 19 matches this season, Lyon are sixth in the league, just four points off a Champions League spot even though they have gone five matches without a win across all competitions.
They were also knocked out of the French Cup following a defeat by French fifth-tier club Bourgoin-Jallieu in the round of 32.
Lyon, however, said the decision to part ways with Sage was a "sporting choice."
Lyon are owned by American businessman John Textor, who visited the club in person this week.
"Olympique Lyonnais has been compelled to suspend coach Pierre Sage and staff members Jamal Alioui, Rui Lemos, Denis Valour and Remy Vercoutre, pending a decision in the next few days," Lyon said in a statement.
The seven-time French champions added his firing "does not call into question the tremendous work carried out at the beginning of 2024, for which Olympique Lyonnais will always be grateful to Pierre Sage and his team."
Lyon next host Bulgarian side Ludogorets in the Europa League on Thursday.
with Reuters
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