The move comes a week after the 57-year-old was suspended for six months to stop an anti-doping test.
The former Deputy Chief of Manchester United has also been criticized for poor performance of Portugal in the final stage of World Cup 2010 qualifiers and in Euro 2012.
"Contract of Carlos Queiroz is settled with immediate effect," said that the Portuguese Football Federation (PFF).
"This decision was communicated to Carlos Queiroz, who will receive the reasons for the decision of first hand".
Queiroz, a former head of Real Madrid, had two years left on his contract.
His lawyer, Rui Patricio, said that the resignation had ' "the inevitable path" but added he would fight it.
"We are not satisfied with the fact that the rights of queiróz," said Patricio.
"If the contract was terminated without cause, there should be compensation. If there were Government interference, then international organisations and means, of course, Fifa, alerted.
Queiroz was suspended for one month for misconduct in August after he was found to have insulted a team anti-doping and disturb your work.
The prohibition, related to a test conducted in may, it was later extended to six months.
Queiroz denied wrongdoing. None of the players tested positive.
We are not satisfied with the fact that there are respected the rights of QueirozThe coach, appointed in 2008, has been under pressure after leaving Portugal in hand the last-16 stage of World Cup to eventual winners Spain.
The team also had their worst start to UEFA European Championship finals since 1996.
They lost 1-0 to Norway on Tuesday and attracted 4-4 with Cyprus in the opening match. Wizard of queiróz, Agostinho Oliveira, was responsible for such occurrences.
The PFF said he hoped to appoint a successor to Queiroz before Euro 2012 Portugal qualifier against Denmark on October 8.
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