The Spanish Football Federation made its announcement at around 11am on Wednesday ahead of a news conference at which president Luis Rubiales said: "We have been forced to dispense with the national coach. We wish him the greatest of luck."
The 51-year-old, who was in charge of the national team for two years, had agreed a three years contract at Real Madrid to replace Zinedine Zidane.
However, the decision angered the Spanish FA with Rubiales adding: "I don't want to get into how Real Madrid should go about things. The Spainish team is the team of all of Spain.
"If it had been up to Julen it wouldn't have happened in this way and I wouldn't have found out five minutes beforehand.
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