The Brazilian Football Confederation (CBF) have decided not to ask Scolari, whose contract expired at the end of the World Cup, to return as manager on a new deal, with an official announcement planned for Monday, according to Globo.
Scolari took over as manager of Brazil for the second time in 2012 and led his players to the Confederations Cup title in 2013, but he came up short at the main event this summer.
The favoured hosts finished fourth in the World Cup. Eventual champions Germany hammered them 7-1 in the semifinals, and the Selecao followed that up with a 3-0 defeat to the Netherlands in the third-place game.
Scolari, 65, will conclude his time in charge of Brazil with a record of 19 wins, six draws and four defeats.
At his final news conference after the loss to the Netherlands, Scolari was coy on his future.
"If we won or lost, my position was always going to be vacant," Scolari said, referring to his expiring contract.
"When we started, we had a deadline to quit our jobs at the end of the World Cup regardless of the result. That is exactly what we are going to do, which is what was agreed upon with the final report for the [CBF] president."
He did have the support of the CBF's president-elect, Marco Polo Del Nero, who will take over as CBF chief next year. But that apparently will not be enough for Scolari to keep his position.
The entire coaching staff will be replaced, Globo reported.