Challandes took over in February 2014, but has won just won of his 10 games at the helm.
Sunday's 2-1 defeat to Albania left Armenia with one point from four matches in Euro 2016 qualifying Group I.
"I came to Armenia one year ago and my goal was to advance to Euro 2016 final round with the team," Challandes said.
"It was a big challenge for me. It was clearly mentioned in the contract, that we have to get points for the qualification, otherwise I will quit. That's why everything is clear for me now."
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