Fernando Santos has left his job as Portugal coach after his team lost to Morocco in the World Cup quarter-finals, the Portuguese Football Federation (FPF) said on Thursday.
The Portuguese suffered a shock 1-0 defeat by Morocco in Qatar on Saturday, after Santos started the match by leaving the country's all-time record goalscorer Cristiano Ronaldo on the substitutes' bench.
In an emotional video message, Santos said that being Portugal's coach was a "dream come true" and a "life goal" he fulfilled.
"When you lead groups, you have to make some difficult decisions," he added. "It's normal that not everyone was happy with the choices I made but the decisions I took were always thinking about what would be best for our team."
In a statement, the FPF said both parties agreed to terminate the contract as it was the "right moment to start a new cycle".
Santos, who has been widely criticised for his tactics, became Portugal coach in 2014 and led the country in 109 matches. They won the European Championship in 2016 and UEFA's inaugural Nations League in 2018-19.
"In addition to the titles won, Fernando Santos became the coach with the most games and most victories," FPF said. "It was an honour to have a coach and a person like Fernando Santos as the head of the national team."
FPF said its board would now start the process of selecting a new manager.
Various Portuguese media outlets have reported that names such as AS Roma manager Jose Mourinho, the national under-21 coach Rui Jorge and Lille boss Paulo Fonseca were being considered as possible replacements.
Mourinho arrived earlier on Thursday in Portugal's southern region, where AS Roma will play three friendlies, but remained silent when questioned by reporters about Santos' succession.