Malawi have placed coach Young Chimodzi on leave with immediate effect until his contract expires on 31 July.
The Football Association of Malawi said in a statement on Sunday that Chimodzi's deal would not be renewed.
The decision to remove Chimodzi from his position comes after the 2-1 loss to Zimbabwe in Saturday's 2017 Africa Cup of Nations qualifier.
Ernest Mtawali has been installed as a caretaker coach until a permanent appointment is made.
"FAM has advised the head coach and his assistant (Jack Chamangwana) to immediately proceed on leave pending the expiry of their contracts on 31 July.
"FAM would like to express its disappointment with the result against Zimbabwe in a match which it feels the Flames were in a better position to win and accordingly apologise to the nation for the painful loss," read the football governing body's statement.
"Upon consultation with the Malawi Government, FAM will advertise for the position of the Malawi national football team head coach as soon as possible.
"It is expected that the new coach will be appointed by 1 August. FAM will cast its net wider both locally and internationally in search for a new coach."
Chimodzi and Chamangwana were appointed in January 2014 - despite having only recently been sacked from the Flames' technical panel.
Fifteen months later, FAM said: "We have lost confidence in the coaches due to poor performance of the Malawi national football team generally during their term of engagement culminating into the recent loss to the Zimbabwe national football team.
"The coaches have been in charge of 23 matches of which they won six, drew five and lost 12 representing a 23% wining rate."