Maradona admitted he wanted to stay in the job ahead of a meeting with AFA president Julio Grondona on Monday.
But, after Maradona rejected demands to change his backroom team, the AFA voted not to renew his deal and made under-20 coach Sergio Batista caretaker boss.
Argentina crashed out of the 2010 World Cup finals at the quarter-final stage, where they lost 4-0 to Germany.
A statement on the AFA website read: "Mr Julio Grondona made the members of the executive committee aware of the conversation with Mr Diego Maradona, setting out the points which had come out from the meeting.
"The executive committee unanimously resolved not to renew the contract with Mr Diego Maradona as coach of the Argentina national football team."
AFA spokesman Ernesto Cherquis Bialo added: "Maradona's requirements were very far from the FA's possibilities."
  
Batista played in midfield alongside Maradona in the 1986 World Cup final and managed Argentina to gold at the 2008 Olympics.
He will pick the squad for the country's next game against the Republic of Ireland on 11 August at Dublin's Aviva Stadium - the first international football match at the redeveloped Lansdowne Road site.
Bialo stated that a new full-time appointment could be announced in time for Argentina's next home match, against world champions Spain on 7 September.
Estudiantes coach Alejandro Sabella, who was Daniel Passarella's assistant at the 1998 World Cup, Racing Club boss Miguel Angel Rosso and Batista have already emerged as potential successors to Maradona.
Before the pair's two-hour meeting on Monday, Grondona stated he was hopeful a new four-year deal could be agreed with Maradona.
But while Maradona was keen to continue in the job, he also declared he would he would refuse to renew his contract, which ended after the defeat to Germany in Cape Town, if the AFA dismissed even one of his staff.
"If they touch a hair of one of my guys, even if it's the masseur or the kitman, I'm going," he told El Show del Futbol on America TV.
Grondona had already signalled his desire for backroom changes after admitting the AFA "had lots of problems" with one of Maradona's assistants, former Argentina defender Oscar Ruggeri.
Grondona's demand, then, for the replacement of a number of assistants - one of whom was believed to be Maradona's close friend Alejandro Mancuso - was, unsurprisingly, snubbed by the football legend.
Although appearing defensively frail at times, Maradona's side topped Group B in South Africa with victories over Nigeria, South Korea and Greece.
They then overcame Mexico 3-1 to reach the quarter-finals.
But the emphatic nature of their exit at the hands of the Germans gave fresh ammunition to the critics of Maradona's tenure, which included a fraught qualification campaign.
Since taking the job in November 2008, Maradona, considered by many as the greatest footballer in history, won eight and lost seven of his 15 games in charge of La Albiceleste.

Forget Forlan, forget Muller, forget Iniesta. If there was one undisputed star of the FIFA World Cup™ just past, it was not any of these on-song stars, but a certain cephalopod over 5,000 miles away.
After all, impressive though Forlan and Co were, none could claim that their performances throughout South Africa 2010 were flawless. Paul the octopus, on the other hand, never put a foot, or tentacle, wrong during a month that witnessed his meteoric rise to superstardom - and ended with a transfer tug-of-war.
For anyone somehow unaware of what all the fuss was about, Paul’s celebrity status was earned by an unblemished run of eight successful predictions from the first round of group matches all the way through to the Final. The method by which Oberhausen Sea Life Centre’s most famous resident picked his winners was to eat a mussel from one of two containers, each adorned with the flags of the competing nations. So unerring did he prove that several news channels across Europe began to broadcast Paul’s predictions live, while the phrases ‘Paul the Octopus’ and ‘Pulpo’ - the Spanish word for octopus - generated huge internet traffic, taking their place Twitter’s top ten global trends.
Not that his success gained him universal popularity. When, after correctly predicting the outcome of Germany’s first four matches, Paul tipped Joachim Low’s side to see off Argentina, Nicolas Bedorrou – a famous Argentinian chef – reacted by posting an octopus recipe on facebook. Worse was to follow when an erstwhile adoring German public turned on their ‘psychic’ mascot for foreseeing their semi-final defeat to Spain, with anti-octopus songs chanted at Berlin’s Fan Fest and newspapers filled with headlines such as ‘Throw him in the frying pan’ and suggestions that he be transferred to the shark enclosure.
However, at the same time he was being labelled a ‘traitor’ in Germany, Paul was becoming a hero in Spain, especially after he followed up his last four forecast by predicting La Roja’s first-ever FIFA World Cup Final win. Spanish prime minister Jose Luis Rodríguez Zapatero even light-heartedly promised to send a team of bodyguards to protect this unlikeliest of football icons, while environment minister Elena Espinosa promised protection under conservation laws.
 
They brought the World Cup, we [will] bring Paul. He's a symbol of this championship.
 
Madrid Zoo table their bid
Offers from Spanish businessmen also began to arrive, a summer festival was planned in the octopus’s name, while many fans of the fans who cheered Iniesta and Co to the title sported t-shirts and hats bearing the image of their new hero. Some even suggested the octopus should replace the bull as Spain’s national symbol.
Elsewhere, a passionate debate arose over Paul’s nationality as the tournament drew to a close, with his German trainer suggesting that he had been caught in Italian waters, not hatched at an English Sea Life Centre as originally suggested. "The octopus's name is Paolo!" was the reaction of sports newspaper Tuttosport, while Il Corriere della Sera claimed the news offered "small satisfaction for Italy at the end of a tournament that has given the Azzurri very little joy.”
Even when the curtain came down on South Africa 2010 and the Oberhausen Sea Life Centre announced that Paul would be retiring on a high and “getting back to his former job of making children laugh,” the drama continued, as Madrid Zoo mounted an audacious transfer bid for their very own Galactico. Zoo spokeswoman Amparo Fernandez spoke of a desire to acquire Paul as a tribute to the triumphant Spanish team, saying: "They brought the World Cup, we [will] bring Paul. He's a symbol of this championship."
Yet despite the offer of other animals and a ‘transfer fee’, not to mention an additional bid from a Russian betting firm, it seems that Paul will be staying put in Germany. "It's totally out of the question to sell Paul or lend him out," Sea Life spokeswoman Kerstin Kuehn announced yesterday. "He will enjoy his greatly deserved retirement in Oberhausen."
It seems, therefore, that Paul will be allowed to quietly leave the stage, leaving wildlife experts and football fans alike to wonder just how an octopus managed to predict his way to become a FIFA World Cup legend.

Andres Iniesta Goal Video

It came after an exhausting 1-0 victory in extra time over the Netherlands on Sunday. Two years after winning the European title, the stylish Spaniards did even better.

This was a physical test of attrition that sometimes turned dirty—a finals-record 14 yellow cards were handed out and the Dutch finished with 10 men. In the end, it was Andres Iniesta breaking free in the penalty area, taking a pass from Cesc Fabregas and putting a right-footed shot from 8 yards just past the outstretched arms of goalkeeper Maarten Stekelenburg with about seven minutes still to play, including injury time.

“When I struck it, it just had to go in,” Iniesta said.

For the Dutch and their legions of orange-clad fans wearing everything from jerseys to jumpsuits to clown gear to pajamas, it was yet another disappointment.

Even with their first World Cup title tantalizingly within reach, they failed in the final for the third time. This one might have been the most bitter because, unlike 1974 and 1978, the Netherlands was unbeaten not only in this tournament, but in qualifying for the first World Cup staged in South Africa.

Soccer City was soaked in Oranje, from the seats painted in that hue throughout the stadium to pretty much everyone seated in them. Unlike when they lost to hosts West Germany and Argentina in previous finals, the Dutch were something of a home team this time.

The Spaniards, though, were the winners.

“We have all done an incredible job,” Iniesta said. “I don’t think we even realize what we have done.”

They had pockets of supporters, too, to be sure, dressed in red and scattered around the stadium. They might have been the minority, but when the final whistle blew, they were tooting their vuvuzelas loudest in tribute to their champions.

The goal in the 116th minute came off a turnover by the Dutch defense that Fabregas controlled just outside the penalty area. Iniesta stayed on the right and sneaked in to grab the pass and put his shot to the far post. Stekelenburg barely brushed it with his fingertips as it soared into the net.

Iniesta tore off his jersey after the goal and raced to the corner where he was mobbed by his teammates. Several Dutch players wiped away tears as they received their medals as runners-up—yet again. They won every qualifying match and all six previous games in South Africa before the bitter ending.

The Netherlands now has more victories in World Cup games without a title than any nation: 19. Spain held that dubious record with 24.

Netherlands coach Bert van Marwijk took off his silver medal as soon as left the podium, with a look of disgust on his face.

The Spaniards saluted their fans with arms raised high, then lifted their coach, Vicente del Bosque, in the air in celebration.

“This is immeasurable for Spain,” Del Bosque said.

It promises to be a great game on Sunday, featuring two of the greatest footballing nations never to have won the World Cup. Spain and the Netherlands have been playing the most attractive football of all the teams in this World Cup, which bodes well ahead of the final.
The Netherlands has always been a great attacking team over the years with players like Cruyff and Van Basten. This current side is no different, with match winners like Robben, Van Persie, and Sneijder. This time round they have been very solid in defense, too, with every player working really hard for the team.

I expect the current European champions, Spain, to have plenty of possession. Xavi, Iniesta, and Alonso are so important to the midfield, and they retain possession and pick out passes with ease. I've also been impressed with their defense in this tournament, but they have quality all over the pitch. David Villa will want to not only win the World Cup but the Golden Boot as well.
I expect it to be close and hope for a few goals in this match. There promises to be lots of interesting duels all over the park, but I can't wait to see Sneijder up against Xavi, two of the world's best footballers.

It's shaping up to be a great match, and it might be that little bit of luck that helps decide the eventual winner. I would like to see Spain win, as I have many happy memories from living there, and I know how important it would be for the country. I have many friends there who would love to bring the trophy home to Spain for the first time. My boys also asked for Spain shirts to watch the final in, so I know who they will be supporting.

For many years, they have underperformed in World Cups, considering their level of talent, but this team has the look of a winner.