By SABC Sport
16th December 2022
Santos had been contracted until after Euro 2024, but the Portuguese Football Federation said now was the "right moment to start a new cycle".
The 68-year-old took over in October 2014 and guided Portugal to success at Euro 2016 and then again in the inaugural 2019 Nations League campaign.
Despite losing to South Korea in their final Group H match in Qatar, Portugal had progressed as winners and thrashed Switzerland 6-1 in the last 16 when Santos dropped Cristiano Ronaldo from the starting line-up.
Ronaldo again started on the bench for the quarter-final, with Morocco going on to secure a memorable 1-0 victory with a first-half header from Youssef En-Nesyri.
Santos insisted he had no regrets about the decisions over Ronaldo, who was left in tears at the final whistle.
Portugal will now begin the process of appointing a new head coach, with Roma boss Jose Mourinho one of the early favourites for the post.
A statement from the Portuguese Football Federation read: "It was an honour to have a coach and a person like Fernando Santos at the head of the national team.
"The FPF thanks Fernando Santos and his technical team for the services provided over eight unique years and believes that this thanks is also made on behalf of the Portuguese people.
"The FPF board will now begin the process of choosing the next national coach."