Luiz Felipe Scolari quit as manager of Brazil after the host nation tasted their first back-to-back defeats on home soil since 1940 during a humiliating World Cup.
The 65-year-old stood down after Brazil failed to restore pride on Saturday as they were beaten 3-0 by Holland in the third place play-off, having lost 7-1 in the semi-final five days before to Germany.
The decision was announced by the Brazilian Football Confederation following a meeting between Scolari and president Jose Maria Marin.
Marin is scheduled to step down next year in favour of Marco Polo Del Nero. The latter gave Scolari, who won the 2002 World Cup with Brazil, his backing after the humiliating defeat in Belo Horizonte.
Now, though, all parties have agreed a fresh approach is needed to rebuild Brazilian football. 'Coach Luiz Felipe Scolari and his fellow coaching staff surrendered their positions to the board of the Brazilian Football Confederation,' a CBF statement read.
'The resignation was accepted by president Marin, who was keen to thank all the coaches and players and, by extension, the Brazilian fans for their support throughout the World Cup campaign.
'Scolari and his entire coaching staff deserve our respect and gratitude. They were responsible for returning to the Brazilian people your love for the team, despite not having achieved our greatest goal.'
The statement added Scolari restored pride to the Brazilian flag during his tenure
The 2014 World Cup was the first time Brazil tasted defeat in a competitive fixture at home in 39 years, having won the Confederations Cup last year. The loss of the injured Neymar and suspended captain Thiago Silva proved detrimental, as Germany went 5-0 up by half time at Estadio Mineirao. As a result, Scolari bared the brunt of the blame. It is unclear, however, where the former Portugal and Chelsea manager intends to go from here.
'I will be remembered as the coach to lose 7-1, but I knew that risk when I took the job,' Scolari said last week. 'The person who decided the line-up, the tactics, was me. It was my choice.'
Brazil, meanwhile, will take their time before appointing a permanent successor, with under-23 coach Alexandre Gallo likely to be the interim caretaker. Corinthians manager Tite, Sao Paulo head coach Muricy Ramalho and ex-Brazil boss Vanderlei Luxemburgo are among those in the running. Brazil have never appointed a foreign coach.