Ecuador were knocked out at last year's World Cup in the group stage after a 2-1 loss to Senegal. According to local media reports, the FEF was keen to renew the Argentine coach's contract, but he declined the offer.
"After several months of talks between the Federation and Gustavo Alfaro, the parties have decided to be free to evaluate and seek new options for the benefit and development of their interests," FEF said in a statement.
"Alfaro and his staff shared our vision and desire for change and empowered them with their knowledge and work. The results are there for all to see and we only have words of admiration for the process that was achieved, and of gratitude for Alfaro and his team."
Alfaro became Ecuador coach in 2020 and led them in 35 matches. He helped the team reach the World Cup finals for the fourth time after finishing fourth in South American qualifying behind Brazil, Argentina and Uruguay.
