The 57-year-old is the second coaching casualty of the tournament in Gabon after Algeria coach Georges Leekens quit following his side's surprise first round elimination.
Dussuyer had been in the job for just over 18 months and got the Ivorians off to a good start in the group phase of the World Cup qualifiers late last year.
But defeat by Morocco in Oyem last Tuesday saw the Ivorians unable to defend their African title after drawing their first two group games and then losing their key last group match.
"The decision came after consultation with the federation. We thank him for his work, as well as his humanity, professionalism, humility and discretion," said a statement from the Ivorian Football Federation on Sunday.
"The federation would like to reassure the public that measures are in place to find his replacement."
Dussuyer has coached at five Nations Cup, three times with Guinea, once with Benin and then with the Ivorians.
(Reporting by Mark Gleeson in Cape Town; Editing by Ian Chadband)
- Sports & Recreation
- Michel Dussuyer
- Ivory Coast
- African Nations Cup