John Toshack resigned as Wales coach on Wednesday following a loss to Montenegro in the team's opening 2012 European Championship qualifier.
The 61-year-old Toshack is quitting for the second time, having walked out after one match in 1994 - a 3-1 loss to Norway - after being hired on part-time basis.
Toshack returned to the job in 2004, succeeding Mark Hughes and was contracted until 2012.
Despite the 1-0 loss to Montenegro, Toshack said he had been prepared to stay in charge until after next month's qualifiers against Switzerland and Bulgaria.
"I thought after three matches of this group we would review everything," Toshack said. "Even after the disappointment of the game in Montenegro that was still the way I felt, but we have come to the agreement that this might be better for everyone concerned."
The former Liverpool striker began his coaching career at Swansea and has moved on to coach in Portugal, Spain, Turkey, France and Italy. He served two stints at Real Madrid, winning the league title in 1990.
Wales last reached the finals of a major tournament in 1958, when it qualified for the World Cup.
"Wales are still very much in this group, and now the decision has been made hopefully they'll be able to get some positive results in the next two games," Toshack said.
Toshack had overseen 21 wins in 53 internationals in his second stint in charge.