Mano Menezes has been sacked as the football coach of Brazil following a meeting with the country's top football officials.
The decision Friday comes just days after Brazil secured the Superclassic of the Americas series against rivals Argentina following a dramatic penalty shootout in Buenos Aires, reports Xinhua.
Brazil's 2002 World Cup-winning coach Luiz Felipe Scolari has been widely tipped as Menezes' replacement.
"In the beginning of January, probably in the first 10 days, we will make an announcement regarding the new coach and new structure," Brazil's national football director Andres Sanchez said during a press conference.
"In my opinion it wasn't the time to make this decision but I respect the hierarchy's view and understand their reasoning. Mano did a good job. He had difficulties at various times but results were improving."
Menezes had been the subject of constant speculation since Brazil's 1-2 Olympic final loss to Mexico at the London Games.
The result was seen as a failure in Brazil due to the fact the Olympics are the only major international tournament the country is yet to win.
Menezes, 50, took charge of Brazil after the team's quarter-final exit at the 2010 World Cup in South Africa. He coached the national side 33 times, posting 21 victories, six losses and six draws.
Former Brazil and Barcelona striker Romario, who has been a fierce critic of Menezes in recent months, hailed the decision as a "historic day" for Brazil.
"It's time to let off fireworks and celebrate," the 1994 World Cup winner said on his Twitter account.
"At last the incompetent people at the Brazilian Football Confederation (CBF) have done the right thing. I knew it was going to happen. Unfortunately it took longer than it needed to, but it happened."
Romario, now a federal deputy for the Brazilian socialist party, said he hoped 64-year-old Scolari would be given the job.
"In my opinion, the coach has to be Scolari but that will only happen if Andres Sanchez leaves," Romario said.