The Saudi football federation sacked the national team's Dutch manager Frank Rijkaard on Wednesday after Saudi Arabia failed to pass the group stage of the 2013 Gulf Cup of Nations in Bahrain.
"The decision to fire Rijkaard was taken unanimously during the board meeting," a source close to the meeting told AFP.
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Rijkaard is the second manager to lose his job at the championship after Qatar announced the dismissal of Brazilian coach Paulo Autuori on Tuesday following the team's elimination in the first round.
Saudi Arabia lost 2-0 to Iraq and 1-0 to Kuwait, and had a lone victory over Yemen, 2-0.
Rijkaard's contract with Saudi Arabia was reportedly worth $9 million, with a penalty clause of more than $4 million in case of dismissal.
But the head of the kingdom's sports body, Prince Nawaf bin Faisal, who was the head of the football federation when former Barcelona boss Rijkaard was hired in July 2011, has said that he is willing to foot the bill of ending Rijkaard's three-year contract.