Sacked Melbourne chief executive Paul Guerra has flagged legal action against the AFL club in the wake of his shock axing.

Guerra was sensationally dumped by the Demons on Tuesday, one year to the day after his appointment as CEO was announced and only seven months after he officially started in the role.

Experienced AFL club administrator Brian Cook has been named interim CEO, with a new full-time boss set to be named in the coming days.

Melbourne's seismic off-field move comes with the revitalised Demons flying on the field, boasting a 5-2 record in their first season under new coach Steven King.

The fourth-placed Dees take on top-ranked Sydney in a huge clash at the SCG on Sunday.

But further off-field turmoil looms after Guerra told the Seven Network his lawyers were involved.

"It's been a challenging day. I'm really puzzled by the board's decision," Guerra said.

"I'm really proud of the team we've put together and I'm really proud of the role that I've played in the team's success.

"To everybody that's sent messages and phoned today - and there's been a lot - I really appreciate that.

"The matter's now in the hands of my lawyers, so I can't say much more than that for now."

Melbourne issued a brief club statement on Tuesday confirming Guerra's departure, but did not detail the club's reasons for the decision.

In a separate statement to the Seven Network, Demons president Steven Smith said: "There was a loss of confidence in his ability to lead the club and a breakdown of relationships with the board.

"We've shown we can make hard decisions with Simon Goodwin's departure and Steven King's appointment."

Guerra was integral in Melbourne's decision to appoint King as a replacement for 2021 premiership coach Simon Goodwin, who was sacked last August.

King and Cook have a relationship from their time together at Geelong, which culminated in the Cats' drought-breaking 2007 premiership.

Cook played four senior games for Melbourne in 1977 as a teammate of Smith, during a short-lived VFL career.

As CEO, he oversaw West Coast's first two AFL premierships and a further three flags at Geelong, during periods of great success on and off the field for those clubs.

Cook also spent four years as Carlton CEO before handing over to Graham Wright last year, and has been consulting to Melbourne since late last year.

"Brian is a highly respected operator and with over 35 years of experience in AFL clubs he will provide much needed leadership and guidance through this period," Smith said in the club statement.

"We are pleased that Brian has agreed to step into the role in an interim capacity until a permanent CEO can commence."

Guerra was boss of the Victorian Chamber of Commerce and Industry when he was appointed as Melbourne CEO last April.

His axing continues a revolving door in the Demons' top offices.

Guerra took over as CEO from former interim boss David Chippindall, who held that role after Gary Pert quit in October 2024.

Smith is the club's fourth president in the past six years.

While Melbourne are flying on the field, they have faced several off-field issues, including stumbling blocks in the proposed relocation of the club's headquarters to Caulfield racecourse.

The Demons have also met competition from Richmond in a battle to secure Waverley Park as an interim base.

Controversy also surrounded premiership defender Steven May's retirement on the eve of this season, when Demons football boss Alan Richardson revealed sensitive personal information in a meeting with players' partners.