Michel, 48, spent almost his entire club career with Real Madrid, playing for the Spanish giants from 1982-96. He also played 66 times for Spain and had 21 goals from 1985-92.
He entered the coaching profession in 2005 with Rayo Vallecano, and has also coached Real Madrid's B team and Getafe.
Marcelino's tenure ended following Sunday's 2-1 loss to Villarreal, which gave Sevilla five losses during a seven-game winless streak.
Sevilla is just 11th in La Liga after 21 matches, with European places as well as relegation within reach.