This came after a video was released in which he made derogatory remarks about Liverpool and their former manager Jurgen Klopp.
Professional Game Match Officials Limited (PGMOL) confirmed the termination of the 42-year-old Nottinghamshire official's employment in a statement this afternoon.
The following was written there: “Following a thorough investigation into David Coote's conduct, his employment with PGMOL has been terminated effective today.
“David Coote's actions were found to be in material breach of the terms of his employment contract and his position was deemed untenable.
“Supporting David Coote remains important to us and we remain committed to his welfare. David Coote has the right to appeal the decision to terminate his employment.”
Coote was the referee when City lost on penalties in the first round of the Carabao Cup at Grimsby in August.
He also came on as a substitute in City's League One play-off semi-final second leg at Fleetwood in 2017, which ended in a goalless draw as Stuart McCall's Bantams advanced to Wembley.
