Carlos Queiroz has resigned from his role as Iran coach, saying external pressures had forced him into making the decision.
Queiroz signed a new deal until 2018 in September after his side produced some battling displays in the group stage of last summer's World Cup.
However, according to the Fars news agency, the Portuguese decided to quit after being prevented from selecting Sardar Azmoon and Alireza Jahanbakhsh for Iran's forthcoming friendlies against Sweden and Chile.
The pair were instead called up to play for the Olympic under-23 team by the Football Federation Islamic Republic of Iran (FFIRI).
"I didn't want to leave and was not even thinking about it," Queiroz is quoted by AFP as telling the Fars news agency.
"It was not in my control and it was not my decision. Even my boss didn't want this but unfortunately both sides were forced to agree on this because of pressures."
The reported disagreement over Azmoon and Jahanbakhsh would appear to be the latest of several Queiroz has experienced with the FFIRI and Iran's Sports Ministry.
Pre-World Cup training camps were cancelled last year, with Queiroz also complaining that there was not enough money to spend on kits for his players.
"He cannot carry on with this situation and he has resigned from his post," FFIRI president Ali Kafashian said in an interview with the official IRNA news agency. "We cannot force him to stay."
Former Real Madrid boss and Manchester United assistant coach Queiroz will formally leave his post at the end of March after the games against Sweden and Chile, according to the IRNA news agency.