Real Madrid and Spain captain Sergio Ramos is said to have pleaded to have the manager who performed so well during qualifying stay on, but his departure was announced at a press conference this morning.
Lopetegui had a sterling tenure leading Spain.
Lopetegui is returning to Spain this afternoon and was confronted by a hoard of reporters as he arrived at the airport in Russian Federation to board his flight.
Real's confirmation of Lopetegui's appointment came in a three-paragraph statement on their website.
Rubiales, the former head of Spain's players union who was elected as federation president last month, said he was forced to fire Lopetegui because he had been left in the dark by his coach and by Madrid.
"We want to thank Julen for all he's done and he's a big reason behind us being in Russian Federation, but we feel obliged to dispense with his services", said Rubiales.
Later Wednesday, Spain named Hierro as the coach for the tournament in Russian Federation. There is a lot to do.
"I'm sure this will, in time, make us stronger". We asked Eurosport's Adrian Garcia for his take on the biggest managerial change of the summer.
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Spanish newspaper AS claim Lopetegui could now be unveiled at the Bernabeu as early as Thursday afternoon. In a World Cup nobody gives anything away.
He has done well through the levels with Spain, he is doing well now, and even though they have stuttered in some of the World Cup warm-up games, the football being played by Spain has been fantastic.
Hierro, a victor of five La Liga titles and three UEFA Champions Leagues in a glittering Madrid career, is relatively inexperienced as a coach.
Lopetegui leaves his managerial post unbeaten.
Although, if he takes Spain deep in the World Cup then little will be made of that.
"It's a nice challenge. But perhaps that was already true and while they have lost much, including perhaps the tactical nuance and variations Lopetegui has introduced, this is a group of players who can still compete and have a certain capacity for self-management", added Lowe.
You cannot do things this way. "We have been compelled to act". "Now more than ever (we must) be with our players". He had previously coached the country's Under 21s team and also been manager at FC Porto for two years.