Many expected Belgium to put in a stellar showing but under the tutelage of Wilmots they woefully underperformed despite the bevy of talent at their disposal.
The Red Devils were dumped out of the competition at the quarter final stage by Wales and only finished second in Group E behind Italy.
"The Royal Belgian Football Association has reached an agreement with Wilmots to end his contract, that lasted until 2018," an official statement read.
"We would like to thank Wilmots for his work during the last four years.
"With Wilmots as head coach, the Red Devils have climbed from the 54th position to the top of the FIFA World Ranking. He managed to win 34 games out of 51, including eight draws.
"Above all, the fans have reinstalled their love for the Belgian Red Devils during this period.
"The KBVB's Technical Commission has evaluated Euro 2016 and has declared that the intended goals have not been reached. There is a common feeling that the team needs a new impulse to lead this group towards a top result at a major tournament.
"The KBVB will immediately start the procedure to find a new head coach, in a transparent way. The idea is to start the upcoming games in September with a new coach, beginning with an international friendly in Brussels against Spain on September 1."
The sacking of Wilmots puts an end to his four year tenure at the helm during which time he also lead Belgium to the quarter-final of the 2014 World Cup.