Fulham have appointed Felix Magath as their manager and charged him with saving their Premier League status after losing faith in René Meulensteen and relieving him of his first-team duties after only 75 days in charge.

The west London club have not technically sacked Meulensteen; rather they have made his position untenable by bringing in Magath to do his job and, although the terms of his departure have not yet been finalised, that will happen over the coming days.

Fulham confirmed the appointment of Magath on an 18-month contract and also said the composition of his backroom staff would be revealed "in the near future". The club's statement made no mention of Meulensteen because when it went out at 6.51pm on Friday, he remained under contract. He still is, until the end of the season, but both he and Fulham know that their working relationship is over. A settlement will now be negotiated.

Fulham felt that they had to act after Meulensteen oversaw a return of 10 points from his 13 league fixtures, after he himself had succeeded Martin Jol on 1 December, and the fighting performances in the past week against Manchester United (away) and Liverpool (home), when they drew 2-2 and lost 3-2 respectively, counted for nothing. Cold analysis revealed a continuation of the worrying trend to ship goals and only one point gained.

Magath, the 60-year-old disciplinarian, who has won the Bundesliga title with Bayern Munich (twice) and Wolfsburg, had been on the verge of returning to Hamburg, the club where he became a legend as a player. Hamburg are mired in a desperate relegation struggle themselves under Bert van Marwijk. Yet Magath's demands for full control of the club and a place on the board were not acceptable and, on Thursday, the deal was called off, paving the way for Fulham to move decisively.

Alastair Mackintosh, Fulham's chief executive, had also considered Dick Advocaat of AZ Alkmaar as he sought a solution to the club's problems. Relegation to Mackintosh and the owner, Shahid Khan, is unthinkable but Advocaat could not be persuaded.

Meulensteen told BBC Radio 5 Live: "I am very surprised, very disappointed and very frustrated, because the job that I stepped into was one that took me by surprise from the start. It was not anticipated with Martin Jol leaving and obviously you then have to step into a situation which is not the best.

I haven't really been given any time to make it work. Twelve games to go, plenty of points to play for ... I'm sure we would have turned it around. I knew the owners were freaking out and panicking about the fact that Fulham could get relegated but they had that sort of attitude already 10 games back. They've hit the panic button on emotions of fear."

Mackintosh had long harboured doubts about Meulensteen's ability to lift Fulham clear of danger but Khan, who bought the club for £150m last summer from Mohamed Al Fayed, believed in him.

The Dutchman, a highly rated coach at Manchester United, was appointed to assist Jol last November and, when Jol was sacked, Khan wanted Meulensteen to be given a chance. Khan had met him in the United States and had been impressed.

Results continued to be poor and Mackintosh oversaw the appointment of Alan Curbishley as the first-team technical director at Christmas. That was followed by Meulensteen pushing for the appointment of Ray Wilkins as the assistant head coach.

Curbishley's presence gave Mackintosh an insurance policy: he could replace Meulensteen with him. Instead Mackintosh and Khan turned to Magath. It is unclear what the future holds for Curbishley but Wilkins will certainly leave the club.

Magath will not win many friends within the Fulham squad owing to his old-fashioned and uncompromising methods. He has used medicine balls in training ground sprinting drills and he is known for working his players into the ground. He will not care and nor will Fulham if he can keep them in the division.

They are bottom of the table, four points adrift of safety. Magath has been out of work since he left Wolfsburg in October 2012.

Khan said: "Felix is an accomplished manager with multiple honours in the Bundesliga and a hunger to replicate his success with Fulham. I'm especially impressed with the reputation Felix has for coming into clubs at difficult times, often late in the season, and lifting them to their potential and beyond.

"Felix knows that is precisely the task awaiting him at Fulham and he made it abundantly clear that he wants and is ready for the opportunity."

Meulensteen, who won three of his 13 league matches and presided over the miserable FA Cup exit to League One Sheffield United, was stunned when he was told of his dismissal by Mackintosh early evening.

Meulensteen said that he had not spoken to Khan. His 75 days as Fulham's manager follow the 16 he lasted at Anzhi Makhachkala last year. "It's the story of my life in this management job," he said. Meulensteen had been backed only two weeks before on transfer deadline day, when he was allowed to sign the striker Kostas Mitroglou for a club record £12.5m, together with John Heitinga on a free and Lewis Holtby on loan. He also took the young midfielders Ryan Tunnicliffe and Larnell Cole from Manchester United and they supplemented the previous loans of Clint Dempsey and William Kvist.

"I feel really sorry for these guys because I brought them in for the right reasons," Meulensteen said. "I still hope they have a future at Fulham, especially the young guys that I signed. It's not too bad for the loan players."

Meulensteen said the knee-jerk reaction is "the problem with owners who don't really understand the Premier League".