The Dutch FA (KNVB) announced the decision in a statement after Blind, had been called in for crisis talks.
The 55-year-old had questioned his own future following Saturday’s loss in Sofia, which left the Dutch six points off the pace at the halfway stage of the European qualifying campaign for the 2018 finals in Russia.
But Blind bemoaned the decision in a statement on Sunday.
“We were on the right track but the Bulgaria loss was a setback. I gave everything I had and I’m really sorry that it ends this way,” said the former Netherlands defender.
The national team has been in the doldrums since missing out on the 2016 European Championship in a dramatic fall from grace two years after finishing third at the World Cup in Brazil.
The defeat by Bulgaria leaves the Dutch facing a tough struggle to finish in one of the top two qualifying places in Group A. They have seven points from five matches and trail leaders France (13 points), Sweden (10) and Bulgaria (9).
“We have respect for what Danny meant to us and the team during his tenure. But because the results were not forthcoming, and because qualification for Russia has gone poorly so far, we felt the need to take our leave of him,” said KNVB director Jean Paul Decossaux.
Blind was appointed on July 1 to replace Guus Hiddink after a poor start in the Euro 2016 qualifiers but a home loss to Iceland in his first game in charge exacerbated the situation.
The Dutch have struggled to find any consistency during his 20-month tenure, winning seven and losing seven of 17 games.
Netherlands assistant coach Fred Grim will stand in as caretaker for Tuesday’s friendly against Italy in Amsterdam while the KNVB start to look for a new manager.
(Writing by Mark Gleeson; Editing by Ken Ferris)