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Halilhodzic, 61, is expected to be replaced by Christian Gourcuff even though both his squad and the Algerian public have expressed their wish to see him remain in the role after he took the north African nation through the group stage and pushed Germany to extra-time in their round of 16 encounter.
The former Rennes and Paris Saint-Germain coach, who is thought to be about to rejoin Turkish side Trabzonspor, published a press release on Sunday stating he would not be extending his contract.
He said: "Today, having lived for three years in Algeria, my family obligations and the attraction of new sporting challenges weighed heavy in my choice. I leave proud of what I have achieved having totally respected my contract with the FAF."