After only six months in charge the player-turned-manager yesterday left his position, citing personal reasons.
A statement from the club said: “Gavin last night took the decision to stand aside for personal reasons and the board will now start the process of finding a replacement.
“We wish him the best of luck for the future.”
Mr Skelton took over from James Fowler in April, who was sacked after a poor second half to the season.
He began very promisingly, losing only one of 12 games in the start of the season, and firmly cementing himself as the positive choice as manager of the club.
However, Skelton’s most recent result was a 4-1 defeat to title challengers Dundee United on Saturday, which brings the club to four consecutive loses.
Now taking over in a caretaker manager position will be former Queens’ captain Graeme Robertson, assisted by Jim Thomson.
Graeme started his professional career at Queens, making nearly 250 league appearances for the club, before leaving in 1987.
In that time he played for top teams across Scotland, including Dunfermline and Partick Thistle.
It is hoped that his wealth of experience will be able to lift the club back to the impressive form they demonstrated at the start of the season.
Meanwhile, the Board of Directors will begin the process of scouting a replacement manager to take the reins at Palmerston on a permanent basis.
That person will become Queen’s ninth manager in the last ten years.