"I want to say that I have decided to resign from my post as trainer of the Chilean national team. On Thursday I made the decision I'm communicating to you and today I resign," Bielsa told a packed news conference at the ANFP's Juan Pinto Duran training complex, his home since his appointment in 2007.
"The reason I've decided to resign is because of the manner in which (ANFP president Sergio Jadue) has acted from when he assumed (office).
"He did everything necessary for me to resign," added Bielsa, who steered Chile to the second round of the 2010 finals in South Africa.
The announcement ended three months of uncertainty over the 55-year-old Argentine's future, but came only two days after Jadue said he would stay.
His departure leaves Chile five months to appoint a coach for the Copa America in Argentina in July. They are in Group C with Uruguay, Peru and Mexico.
Chilean media said the main candidates were both Argentine, former Argentina coach Nestor Pekerman and Claudio Borghi, who has strong ties with Chile having made his name as a coach with leading club Colo Colo.
Bielsa, nicknamed 'Loco' (crazy), signed a new contract in August until 2015, but called a news conference the day before an ANFP presidential election in November to say he could not work under candidate Jorge Segovia who was heavily favoured to win.
Segovia's victory the next day ended the tenure of Harold Mayne-Nicholls, the man who had appointed Bielsa and helped the coach drive Chile's remarkable progress in three years.
However, the Spain-born Segovia's win was declared null and void days later due to a clash between his personal business interests and his position as chairman and owner of first division club Union Espanola.
Jadue, a member of the same opposition group as Segovia, won a second election last month and said he would try to persuade Bielsa to stay on.
The opposition was led by Chile's three big clubs, Colo Colo, Universidad de Chile and Universidad Catolica, who felt they were not getting a big enough share of the cake with the ANFP under Mayne-Nicholls who put his weight behind the national team.
Bielsa had said he would announce a decision as to his future at the end of January, but his delay prompted Jadue to announce on Wednesday that the Argentine would remain at the helm.
"I regret the TV soap opera and the ennui... but I don't feel responsible for this," said Bielsa.
"I think, and I hope I'm wrong, that in time Chilean football will not forgive the present authorities at Colo Colo, Universidad Catolica and Universidad de Chile the consequences of this scenario they have created, the more so taking into account their motives," Bielsa said.
"I want to thank those who allowed me to work in this country's football, the players and my closest associates," said Bielsa, who became immensely popular in Chile even in non-sporting circles.
"To lovers of football and, if I may be allowed, Chileans in general, I want to say to them: 'thank you very much'."
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