The club announced the news on Tuesday morning, three days after Bucks were soundly beaten 3-0 at Darlington at the weekend.
After winning their first game of the season, Cowan had overseen a run of four defeats and one draw in the National League North.
A statement from the board of directors said the decision was 'by mutual consent' with the club in 20th position in the league, one place above the relegation zone on goal difference.
It said: "AFC Telford United have this morning parted company by mutual consent with first team manager Gavin Cowan.
"We would like to thank Gavin for all his hard work at AFC Telford United for five years, both as first team coach and then first team manager.
"Gavin always gave everything to the role, both on and off the field and has a fantastic work ethic and professionalism.
"In particular we have fond memories of Gavin’s first season as manager, when we missed the play-offs by the narrowest possible margin and reached the FA Trophy semi final.
"We remain good friends with Gavin and he is always welcome at the Bucks Head, but we believe this change is in the best interests of AFC Telford United at this time and with much still to play for this season."
It comes after Cowan insisted he would not walk out on the role after Saturday's defeat.
The 40-year-old had said: “If I didn’t think I was the right man for the job I’d have walked.
“I certainly won’t be quitting anytime soon.
“If I’m told that I don’t need to be here then I get that, but at the end of the day you come through tough times."