The decision was taken at a meeting of the French Football Federation (FFF) in Lyon.
To choose a successor to Roger Lemerre is an heavy task
FFF president Claude Simonet
The 61-year-old was widely tipped for the sack after the world champions not only made a first-round exit in Korea, but also failed to win a match or score a goal.
Lemerre refused to resign and although the FFF were initially reluctant to sack him, the decision became increasingly inevitable.
France began the World Cup as tournament favourites but became the first reigning champions to be knocked out of the tournament at the first stage for 36 years.
FFF president Claude Simonet had said prior to the meeting that there was no alternative to the coach's departure.
And after Friday's meeting he said: "Roger Lemerre has been discharged of his mission as the national coach.
"He will continue to sit on the national coaching management body.
"To choose a successor is a heavy task. He will be selected after consultations and named at a later stage,"
Former Lyon coach Jacques Santini is the favourite to succeed Lemerre.
Santini guided Lyon to their first French title last season and is supported by the influential Michel Platini.
Former international midfielder Alain Giresse, who currently coaches Morocco's FAR Rabat, has declared himself a candidate.
France Under-21 team coach Raymond Domenech is considered an outsider, as is Japan's World Cup coach Phillipe Troussier.
Lemerre had been appointed as France coach in 1998 and guided the team to their Euro 2000 victory and the 2001 Confederations Cup.