Sandberg was promoted as the team's third base coach and infield instructor last October.
Manuel had been managing the Phillies since the beginning of the 2005 season, and posted a record of 780-636 in that time.
Philadelphia won a World Series title in 2008 and returned to the World Series in 2009, but were beaten by the New York Yankees. In 12 seasons as a manager with the Phillies and Cleveland Indians, Manuel, 69, has a record of 1,000-826. This season, the Phillies have struggled to a 53-67 record and have been devastated by injuries to first baseman Ryan Howard and pitcher Roy Halladay.