The Azzurri’s loss to Sweden on Monday signified the first time in 60 years that the four-time champions will not compete in the prestigious tournament.
The announcement came after a meeting of the Italian Football Federation (FIGC) in Rome, following the Italian side’s embarrassing flop.
Mr Ventura had reportedly refused to resign despite Italy’s 1-0 loss, but the 69-year-old’s decision to stay on was strongly opposed by the FIGC.
“As of today Gian Piero Ventura is no longer the coach of the national team,” the federation said in a statement.
But FIGC president Carlo Tavecchio has refused to quit, despite calls for him to step down.
“The federation president informed participants at the meeting... of the impossibility for him to resign,” a FIGC statement read.
Mr Tavecchio later told journalists that a new coach would be named at a special meeting of the FIGC federal council which would take place next Monday.
“We are considering big names for the role of coach,” the 74-year-old promised.
Former Chelsea and Real Madrid coach Carlo Ancelotti has been mentioned as a potential substitute, while Chelsea manager Antonio Conte, Juventus boss Massimiliano Allegri and former Manchester City manager Roberto Mancini are also being considered.