The 68-year-old had been in charge for four years after replacing Italian Fabio Capello won 33 of his 56 games in charge of the Three Lions. But critically he won just three of 11 games in major tournament finals.
“I’m sorry it will have to end this way but these things happen,” Hodgson said.
“I hope you will still be able to see an England team in a final of a major tournament soon.
“Now is the time for someone else to oversee the progress of a hungry and extremely talented group of players.
They have done fantastically, and done everything asked of them.”
The English FA have the task of replacing Hodgson now and with World Cup qualifiers in nine weeks, which does not give FA chairman Greg Dyke much time to bring in a replacement.
So who are the potential candidates to replace Hodgson? The list, of English managers will not give Three Lions fans a lot of hope for Russia 2018.
Gareth Southgate (odds 4/1)
Pros: Well established in the FA system and well respected throughout the game, both for his intelligence and his character.
Cons: His club managerial record was mediocre, and his England U21s flopped badly at the European Championships last year, finishing bottom of their group.
Alan Pardew (10/1)
Pros: One of the most capable managers at Premier League level and has certainly served his apprenticeship. Not lacking self-belief to do the job, either.
Cons: Scarred by his experiences at Newcastle, where he was the target of ferocious abuse from fans. Has never managed a ‘top five’ club and had no international experience as a player.
Eddie Howe (14/1)
Pros: One of the brightest managerial prospects in English football, his work at Bournemouth has been little short of exceptional.
Cons: His experience is limited to Bournemouth.
Sam Allardyce (22/1)
Pros: A very safe pair of hands, having succeeded at pretty much every club he has managed. Players love playing for him.
Cons: His time might have come and gone. Retains a reputation for ugly football, which is not entirely deserved.
David Moyes (33/1)
Pros: Did a brilliant job at Everton, where his tough-as-teak mentality and eye for a player turned them into serial top-five contenders. Flopped at Man Utd and Real Sociedad.
Cons: Scarred by his time at United. England fans will not accept a Scot as their national team manager.
Other names mentioned by the bookies include Gary Neville 8/1 and Brendan Rodgers 16/1
Who do you think should be the next England manager?