The club sit second in the Football Conference and heading into the play-offs with one game to play in the regular season.
But they have not won in seven as Cheltenham Town have coasted to the title – and Pennock has been outspoken with criticism of his own club's professionalism regarding the state of the pitch.
Chairman Dale Vince said in a statement: "It was a difficult decision just a week out from the play-offs after Ady had taken us to our highest placed finish in the National League.
"However, as a club we felt we needed to make this change, in order to give us the best chance of succeeding in the play offs.
"We thank Ady for his efforts while at the club and wish him well in the future."
Pennock has been at Forest Green since November 2013 and guided the club to a fifth-placed finish last season before losing in the play-offs against Bristol Rovers.
No news yet though on a replacement.