And the decision was made last night to hand the reigns to assistant manager Gavin Skelton and Jim Thomson for the rest of the campaign.
The Championship side currently sit seventh in the table — 19 points behind Raith in the final play-off spot.
Fowler guided Queens to the play-offs last season, where they were knocked out by Rangers.
But a disappointing end to the campaign for the Doonhamers this year has seen any hopes of repeating that achievement slip away.
Chairman Billy Hewitson said: “It’s always disappointing when a manager leaves, we thank James for his efforts and wish him all the best for the future.”
Queens host Livingston at Palmerston on Saturday before travelling to promotion hopefuls Hibernian on the final day.