Results have since slipped, however, and Reading now lie 20th in the Championship, just three points clear of the relegation zone.
A club statement read: "Reading Football Club announce that Jaap Stam has left his position as manager of the club with immediate effect.
"Majority shareholders, Mr Yongge Dai and Ms Xiu Li Dai, had wanted to give Jaap every opportunity to turn around what has been a difficult and challenging Championship campaign.
"Jaap has not wavered in the time, effort and sheer determination he has put in to try to steer the team away from the position we find ourselves in. However, after careful consideration, the decision has been made that a change is now necessary.
"We would like to thank Jaap for his hard work and commitment to the club, in particular noting what he achieved in a memorable first season in club management, and we wish him the very best of luck in his future endeavours."
Stam, who won three Premier League titles at Old Trafford, got his first shot at management at the club having been assistant at FC Zwolle and Ajax. Reading have not won since January, a 3-1 victory over Burton Albion, and lost to Norwich City 3-2 last time out. After 38 games this season, they have 31 fewer points than at the same point in 2016-17, as Stam failed to replicate his debut campaign success.