Red Star headed into the December-March winter break 10 points behind Serbian champions and league leaders Partizan Belgrade. They also suffered a 20th successive early exit from European competition.
Once a force in Europe, Red Star are now a pale shadow of the side who won Europe's premier club competition before political strife in the Balkans in the 1990s and economic mismanagement at the club reduced them to also-rans.
"We need to inject fresh blood into the club at once by adding young talents from Red Star's academy," Prosinecki told reporters on Monday.
"They are the club's future and I am convinced that's the only right way of looking at things because signing players who become surplus to requirements after six months is not the best policy," he said.
The list of players shown the exit door includes captain Milan Vilotic, former international midfielder Nenad Kovacevic, Ghana defender Lee Addy and striker Andrija Kaludjerovic.
Red Star have added three players from their youth ranks to the first-team squad and are set to sign left back Filip Mladenovic from first division rivals Borac Cacak.
Prosinecki acknowledged rekindling even a fraction of past glory at the debt-ridden club would be a tall order.
"Building a team capable of giving our fans something to cheer about will take time and we can only think of domestic silverware again in a few years," he said.
"We also need to buy several quality players to add steel to a team based on youngsters but it's up to the board to decide whether we can afford them."
