Brazil sacked coach Dunga on Tuesday after the Selecao failed to get out of the group stage at the Copa America Centenario.
Peru eliminated Brazil with a 1-0 result on Sunday thanks to a controversial goal that appeared to come off the hand of striker Raul Ruidiaz.
But the manner of the defeat was not enough for Dunga to retain his job, as the Brazilian Football Confederation (CBF) relieved him of his duties after he returned from the United States on Tuesday.
Sources close to Brazilian club Corinthians told ESPN Brasil that the CBF has already approached their manager Tite to replace Dunga. Tite could also take charge of the Olympic team in August, when hosts Brazil will be in search of their first gold medal.
Technical director Gilmar Rinaldi was also let go after he and Dunga met with CBF president Marco Polo Del Nero on Tuesday.
"The Selecao is the highest point of Brazilian football on the world stage," Rinaldi said in a news conference. "For some reason, it was on a different path. That ends here, right now.
"The results did not come, and I understand the president's position of replacing the entire coaching staff."
Despite losing his job, Rinaldi was still working this week to secure Douglas Costa would be able to play at the Olympics.
A CBF statement said: "CBF announced on Tuesday that decided dissolving the technical staff of the Brazilian national team. The teams coordinator, Gilmar Rinaldi, coach Dunga and his entire staff leave their positions.
"The decision was taken in agreement during a meeting this afternoon and from now the CBF starts the process of choosing the new technical staff of the Brazilian national team.
"CBF is thankful for the dedication, seriousness and commitment of the staff during the performance of their work."
Over three group games at the Copa America, Brazil managed to score only against an overmatched Haiti side in their second fixture, failing to find the net against Ecuador and Peru.
Dunga's job has been under intense scrutiny since reassuming the national team reins following Brazil's disastrous 2014 World Cup on home soil.
Under his watch, Brazil have disappointed in consecutive Copa Americas -- exiting in the quarterfinals against Paraguay in 2015, and failing to leave the group stage this campaign.
Brazil were playing this year's event without Barcelona star Neymar, who was cleared by his club to take part in the Olympic tournament but not the Copa. With their No. 10 absent, Brazil struggled to create and convert chances against resolute Ecuadorian and Peruvian defences, underlining a lack of talent at Dunga's disposal.
However, the former Internacional manager has also refused to count on some Brazilians currently featuring at top European clubs, such as Thiago Silva of Paris Saint-Germain and Real Madrid's Marcelo.