With 100 days left of the player’s contract, the club and the player did not reach an agreement over the captain’s future.
The Spanish Football Association announced Luis Enrique as the new head coach of the Spanish national team on Monday.
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.
The Spaniards sensationally fired Lopetegui on Wednesday and replaced him the same day with Hierro, the Spanish football association's sporting director.
Xavi believes that the Spanish FederationPresident, Luis Rubiales’s decision to fire JulenLopetegui was the right one, despite the crucial timing.
Hierro will succeed the sacked manager, Julen Lopetegui, who was named Real Madrid's new manager only two days before the World Cup.