Wade, who had been GM for four-plus seasons, said he was told in a meeting Wednesday morning with owner Jim Crane and president and chief operating officer George Postolos that he wasn't going to be retained.
Assistant GM David Gottfried will serve as interim GM but is not a candidate for the permanent position, Postolos said.
"There was really no discussion beyond the timing of the announcement," said Wade, who is under contract through 2013 because of an "evergreen" clause that guaranteed him an additional year at the end of the 2011 season. "I did have an opportunity to talk about some of our staff and the esteem I hold them and [manager Brad Mills]. It was a very brief conversation. We'll move forward from here."
Smith, who just completed his 54th season in baseball and 17th consecutive with the Astros, was a close confidant of McLane and had been a mainstay in the Houston baseball scene for decades.
"With the change in ownership, we would like a fresh start in baseball operations," Postolos said in announcing the moves. "We have told Ed Wade and Tal Smith that we are making a change. We recognize their dedication to the Houston Astros. We thank each of them for their significant contributions and many years of service to the Astros, and wish them our very best as they pursue new opportunities.
"The search for a new general manager begins immediately. We are searching for a candidate who has the knowledge, skills and experience to build a winner and a strong commitment to player development in order to sustain success. Our goal is to consistently compete for a championship, and we know the first step towards that goal is to develop one of the top farm systems in baseball. We will hire the best candidate available to achieve our goal."
Smith joined the expansion Colt .45s in 1960 and stayed with the Houston franchise -- except for a 22-month stint with the Yankees that ended in 1975 -- for nearly 25 years before being let go as general manager following the 1980 season.
McLane hired Smith as a consultant while considering purchasing the Astros in 1993 and tabbed him to be the Astros' president of baseball operations on Nov. 22, 1994.
Wade, who was hired Sept. 20, 2007, to replace Tim Purpura, inherited a team with a barren Minor League system and an owner who would trim payroll over the next few years prior to selling the club. The Astros contended in 2008, going 86-75 and finishing in third place, before slumping to 88 losses in 2009 and 86 in 2010.
The team, which traded away franchise icons Roy Oswalt and Lance Berkman in 2010 and up-and-coming players Hunter Pence and Michael Bourn in 2011, hit rock bottom last season en route to losing a club-record 106 games. Twenty rookies saw playing time.
Under the watch of Wade and Bobby Heck, who was hired to be director of amateur scouting after the 2007 season and was later promoted to assistant GM/director of scouting, the Astros have slowly improved their farm system and have begun to reap some rewards at the Major League level.
Still, the club's inability to spend much money on the free-agent market and a lack of talent at the upper levels of the Minor Leagues forced the Astros into a full-blown rebuilding mode.
"I'm disappointed I didn't get a chance to see this through to the end," Wade said. "We've made tremendous strides. We've cleared some pretty serious hurdles and have worked through some obstacles over the last several months, and I do think the organization is better for it. At the end of the day, I would like to think the work we've done will bear the fruit we all anticipate. Not being able to see it through to the end is disappointing."