All these off-field dramas derailed Spain's bid to progress at the World Cup, with the nation crashing out in the Round-of-16 stage to hosts Russian Federation.
Hierro, 50, has chose to "seek new horizons", according to the Spanish football federation (RFEF).
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The Royal Spanish Football Federation (RFEF) have scheduled a news conference on Monday to announce changes to the organisation's structure.
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Spain's interim coach Fernando Hierro has cut his ties with the Spanish Football Federation following the team's disastrous exit from the World Cup last week, the organisation said on Sunday. He also won Olympic gold in 1992. "His mission will be to return Spain to the place where [Luis] Aragones and [Vicente] Del Bosque had taken it".
The president of the federation, Luis Rubiales, added: "We have not spoken to anybody else - only Luis Enrique".
Rubiales also appointed former La Roja and Deportivo La Coruna goalkeeper Jose Francisco Molina as Spain's new sporting director.
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According a UK Sun report, the Real Madrid legend who took over the position just before the ongoing world Cup in Russian Federation, has also distanced himself from his former job as sports director.