Manager Gennaro Gattuso and Italy have agreed to mutually terminate his contract after their failure to qualify for a third successive World Cup.
Italy missed out on a spot at this summer's showpiece event when they were beaten 4-1 on penalties by Bosnia-Herzegovina in Tuesday's play-off.
Gattuso, who won 73 caps for the Azzurri during his playing career, was appointed as Luciano Spalletti's successor in June and won six of his eight games in charge.
An emotional Gattuso apologised for the defeat during his post-match news conference and admitted it was hard to digest.
With a heavy heart, having failed to achieve the goal we set ourselves, I consider my time as coach of the national team to be over, Gattuso said.
The Azzurri jersey is the most precious asset in football, which is why it's right to facilitate future technical evaluations right from the start.
It has been an honour to lead the national team and to do so with a group of players who have shown commitment and devotion to the jersey.
This decision follows the resignation of Gabriele Gravina as president of Italy's football association (FIGC). Former Italian goalkeeper Gianluigi Buffon also resigned as delegation head.
Italy, who are four-time World Cup champions, last participated in the tournament in 2014 and have now missed three consecutive World Cups, a historic low for the nation.
Who will take the role of head coach now remains uncertain, with various candidates being speculated in the media.
