Manager Gennaro Gattuso and Italy have agreed to mutually terminate his contract after their failure to qualify for a third successive World Cup.

Italy missed out on a spot at this summer's showpiece event when they were beaten 4-1 on penalties by Bosnia-Herzegovina in Tuesday's play-off.

Gattuso, who won 73 caps for the Azzurri during his playing career, was appointed as Luciano Spalletti's successor in June and won six of his eight games in charge.

An emotional Gattuso apologised for the defeat during his post-match news conference and admitted it was hard to digest.

With a heavy heart, having failed to achieve the goal we set ourselves, I consider my time as coach of the national team to be over, Gattuso said.

The Azzurri jersey is the most precious asset in football, which is why it's right to facilitate future technical evaluations right from the start. It has been an honour to lead the national team, and to do so with a group of players who have shown commitment and devotion to the jersey.

Following the resignation of Gabriele Gravina as the head of Italy's football association (FIGC) on Thursday, the team is in turmoil. Former goalkeeper Gianluigi Buffon also resigned as delegation head. Italy, despite being four-time World Cup champions, has now missed the tournament three times in a row, something no previous champion has experienced. The search for a new head coach begins as the nation looks to revive its footballing fortunes.