Laws was asked to leave Turf Moor on Wednesday after an inconsistent run of results left the Clarets outside the play-off places in the Championship.
First-team coach Gray has now been handed the reins on a temporary basis and will be looking to take his opportunity to impress.
Gray, who has experience in the top job from his time at Southampton and Northampton, will be assisted by youth-team coach Terry Pashley and club captain Graham Alexander.
Burnley face Sheffield United on New Year's Day before visiting Reading and then entertaining Port Vale in the FA Cup on 8th January.
The managerial situation will be reviewed at that point but club bosses will hope Gray has got their campaign back on track and boosted the chances of an immediate return to the Premier League.
A number of names have already been linked with the permanent position, including Alexander, Phil Brown, Iain Dowie, Sean O'Driscoll, Sam Allardyce, Chris Hughton and Eddie Howe.
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