Hertha announced Babbel had been sacked, six months before his contract expires, with former Eintracht Frankfurt coach Michael Skibbe, currently in charge of Turkish side Eskisehirspor, tipped to replace him.
Having guided Berlin back to the Bundesliga last season, former Liverpool player Babbel had said he would not be extending his contract which expires in June after Saturday's 1-1 draw with Hoffenheim.
Things turned ugly soon after with Babbel, 39, insisting he told the club in November that he would be leaving, but Berlin boss Michael Preetz was adamant Babbel only informed him last Tuesday of his plans to leave.
The feud played out in the German media on Sunday with both Babbel and Preetz accusing the other of lying before Berlin finally announced they had parted company with the former Bayern Munich defender.
"After the developments of the last two days, culminating in the fact that I was called a liar more than once, both the club and I are left with no choice," said Preetz, Berlin's director of sport, when he announced the sacking. "The relationship of trust is no longer there."
On the pitch, 'Gladbach are four points behind league leaders Bayern Munich after their victory over Mainz with 20-year-old Patrick Herrmann scoring the winner as 'Gladbach welcomed back rising star Marco Reus after a foot injury.
Hanover are seventh, just outside the European places, after their 1-1 draw with Kaiserslautern, who are third from bottom.
Hanover took the lead when Norway striker Mohammed Abdellaoue slipped his marker and powered home with only 13 minutes gone, but Kaiserslautern hit back through Slovakia striker Adam Nemec in the 68th minute.
On Saturday, Spanish veteran Raul issued third-placed Schalke 04 with a timely reminder of his considerable talent with a hat-trick in the 5-0 rout of Werder Bremen to boost his hopes of a new deal with the club.
The 34-year-old is out of contract in June and Schalke are set to discuss his future in the Bundesliga's winter break, which lasts four weeks.
The Royal Blues have already said they are interested in signing Cologne's Germany striker Lukas Podolski as a possible replacement, but Raul was sublime as Schalke dismantled Bremen's defence in spectacular style.
The result leaves Schalke level with defending champions Borussia Dortmund on 34 points while both teams three points behind leaders Bayern Munich, who beat Cologne 3-0 on Friday.
Japan's Shinji Kagawa played a starring role as Dortmund enjoyed a 4-1 win at Freiburg.
Goals by Poland striker Robert Lewandowski, who netted twice, plus Germany midfielders Ilkay Gündogan and Kevin Grosskreutz sealed Dortmund's victory to leave them second.
A day after drawing defending champions Barcelona in the Champions League last 16, Bayer Leverkusen crashed to a 3-0 defeat at home to Nuremberg.
Just eight minutes after coming off the bench, Wolfsburg's 20-year-old striker Sebastian Polter netted his first Bundesliga goal on only his second appearance to seal a 1-0 win over Stuttgart. It was only Wolves' fourth win in their last 10 league games.
Hamburg remain unbeaten under new coach Thorsten Fink after they came from behind to draw 1-1 with Augsburg.