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The decision was taken following a meeting of the FAI's ten-man Board of Management at a hotel at Dublin Airport.
A statement from the FAI read: "The board of the FAI met today and considered the implications of non-qualification of the international team for the World Cup in 2006.
"The board also assessed the prospect of achieving success in future European Championships and World Cup campaigns in the context of the development of the game in Ireland.
"Following this meeting the board has indicated that the FAI is to recruit a new international manager to succeed Brian Kerr whose contract expired at the end of the 2006 World Cup campaign.
"The board would like to thank Brian Kerr and the technical staff for their commitment and energy demonstrated during almost three years in charge."