Team Melli lost their vital 2010 World Cup qualifier 2-1 at home to Saudi Arabia on Saturday, a result that leaves them struggling to qualify in fourth place in Group Two with just six points from five games.
Iran's official state agency, IRNA reports that the Iranian Football Federation (IFF) felt they could not ignore the pressure from both media and fans.
Almost 100,000 fans were at the stadium and many demanded Daei’s head in the closing minutes of the match as the visitors came from behind to snatch a late win.
After the match, Daei, who was appointed in March 2008, said he would not resign.
“It is not your place to tell me to stay or leave,” he told reporters. “I was appointed by another entity and I am here to stay for now.”
The former Bayern Munich striker seemed to place the blame for the loss at the feet of his players.
“It was not Ali Daei who lost the match but the national team. We (the coaching staff) had given our plan to the players but when the players don’t execute there is not much I could do.”
“After we scored, we didn’t want to back off from attacking but the team leaders failed. I can’t go in the middle of the field and play…I can only direct.”
It looks as if it will not be doing that any longer.
Iran's next qualifier is in June leaving the Iranian Football Federation with enough time to find a replacement.
It is as yet unclear if German assistant Erich Rutemoller will step into the breach or if the IFF will turn to someone like Afshin Ghotbi who almost got the job before Daei.