The 71-year-old's assistant, Yiannis Topalidis, claims the German has brought to an end his nine-year reign as manager of Greece following their 2-0 defeat to Argentina on Tuesday night.
The loss to Diego Maradona's men denied Greece the opportunity to make the last 16 for the first time in their history with Rehhagel having guided them to only their second-ever World Cup in South Africa.
"I have said what I had to say," Topalidis said. "I have said goodbye to the players and so has the coach."
Rehhagel achieved legendary status when he famously guided Greece to Euro 2004 glory in Portugal.