Rueda had been in the post since early 2018, replacing Juan Antonio Pizzi after he failed to lead the team to the 2018 World Cup.
Chile lost their Copa America crown under Rueda in 2019, having won each of the previous two editions, though they did get to the semi-finals.
But Rueda’s spell in charge has been largely unimpressive, with the team winning just nine of his 27 matches in charge, suffering 10 defeats.
Rueda leaves Chile having only been able to accumulate four points from as many games at the start of qualification for the 2022 World Cup.
His final game was the 2-1 defeat away to Venezuela on November 17.
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