The FSS said in a statement on their website that Muslin had departed after his contract was broken by “common accord”.
He will be replaced on an interim basis by the former Serbian international defender Mladen Krstajic.
Muslin, 64, had taken over in May last year to succeed Radovan Curcic after Serbia’s miserable showing in attempting to qualify for Euro 2016.
He steered them to first place in European qualifying Group D, ahead of the Republic of Ireland, Wales and Austria.
Serbia had not qualified for a major tournament since the 2010 World Cup.
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