Epstein, who was introduced in his new position last week, said Quade would not return after traveling to Florida to tell him in person. He called Quade an "outstanding baseball guy" but it was time for a change.
Quade got the job after a 37-game audition at the end of the 2010 season, replacing Lou Piniella on an interim basis. The Cubs went 24-13 and he was chosen over Hall of Famer Ryne Sandberg for the job last season.
The Cubs went out and stumbled through another disappointing year, finishing fifth in the NL Central with a 71-91 record that extended their infamous World Series championship drought to 103 years.
Epstein and new GM Jed Hoyer had a long meeting with Quade last week. Epstein had another lengthy conversation with him after a news conference Tuesday to introduce Hoyer and new scouting director Jason McLeod.
"While Mike is clearly an asset to any organization and any major league staff, Jed and I believe that the Cubs would benefit long-term from bringing in a manager for 2012 who can come in with a clean slate and offer new direction," Epstein said.
He said the search for Quade's replacement would begin immediately.
"The next manager must have leadership and communication skills; he must place an emphasis on preparation and accountability; he must establish high standards and a winning culture; he must have integrity and an open mind; and he must have managerial or coaching experience at the major league level," he said.
Epstein spoke with Sandberg on Wednesday and let him know that he wasn't in the Cubs' plans. Sandberg, who managed in Chicago's minor league system and left the organization after Quade was chosen to replace Piniella, does not have major league managerial or coaching experience. He managed Philadelphia's Triple-A team last season and could be a candidate in St. Louis.
Another potential candidate in Chicago could be Terry Francona, Epstein's manager in Boston who did not return to the Red Sox after their epic September collapse. Another name mentioned is Tampa Rays bench coach Dave Martinez, who once played for the Cubs.
As for Quade, he ends a nine-year tenure with the Cubs organization. His only season as manager was filled with criticism and questions.
Like why didn't he intentionally walk Albert Pujols in an extra-inning game in St. Louis? The Cardinals star then hit a winning homer. Why did he leave starter Randy Wells in so long against the White Sox, resulting in another tough loss?
Why didn't he play September call-ups more with the Cubs so far out of contention?
Quade's season got off to a difficult start when the Cubs lost two members of their starting rotation, Andrew Cashner and Wells, in early April. It didn't get much better.
Quade was ejected seven times in his first season and he got in a screaming match with starter Ryan Dempster, one of the clubhouse leaders. His general manager, Jim Hendry, was fired during the season, Ryan Theriot, now with St. Louis, at one point said the Cubs were playing like a Triple-A team and mercurial right-hander Carlos Zambrano was a handful all year, criticizing his own closer and then cleaning out his locker after giving up five home runs to Atlanta.
The 54-year-old Quade managed more than 2,300 minor league games in the Montreal, Philadelphia, Oakland and Cubs farm systems before arriving in Chicago.
The Chicago-area native was originally selected by the Pirates in the 22nd round of the 1979 draft out of the University of New Orleans and spent four seasons as an outfielder in Pittsburgh's minor league system before entering the coaching ranks.
He held his first managerial position in 1985, with Class A Macon. He was promoted to Piniella's staff after a running the Iowa Cubs from 2003-06, a stint that included two first-place finishes in his four seasons. He was Chicago's third base coach starting in 2007 until taking over for Piniella. He was also a first base coach in Oakland from 2000-02.
Epstein said he's yet to decide if the team will bring back Zambrano and called his conversations with the pitcher's agent enlightening.
The Cubs are also likely saying goodbye to third baseman Aramis Ramirez. After the team exercised its part of a $16 million mutual option, Ramirez declined and became a free agent. He is looking for a multiyear deal.
Still unresolved is the compensation the Cubs owe the Red Sox for plucking Epstein away with a year left on his contract in Boston. Commissioner Bud Selig said he would mediate if the two sides hadn't agreed by Tuesday, though Epstein said the negotiations could be extended.