The Brazilians drew 0-0 with Ecuador and beat Haiti 7-1 but were beaten 1-0 by Peru to exit the competition at the group stages for the first time since 1987.
Dunga, who was in his second spell as Brazil coach, was fired after a meeting at the CBF in Rio de Janeiro.
“The Brazilian Football Confederation decided this Tuesday to dissolve the technical commission of the Brazilian national team,” the CBF said in a short statement.
“National teams coordinator Gilmar Rinaldi, coach Dunga and their entire team will leave their posts.”
“The CBF has began the process of choosing a new technical commission for the Brazilian team.”
The overwhelming favourite to become Brazil’s new coach is Corinthians 55-year-old manager Tite.
The new coach will also be charged with leading the under-23 squad in August’s Olympic Games in Rio de Janeiro.
Tite led Sao Paulo’s biggest club to Brazil’s Serie A title in 2011 and 2015 as well as the Copa Libertadores and World Club Cup for the first time in 2012.
(Writing by Andrew Downie; Editing by Toby Davis)
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