The Florianopolis-based club said on Monday that the former left back had been replaced by Argel who would lead the side in the opening game against Nautico on Saturday.
Figueirense said in a statement that the 48-year-old, who was coaching a top-flight team for the first time, had left "by mutual agreement" after the team failed to win the Catarinense championship, a season-opening regional tournament.
Branco was partly a victim of championship rules as Figueirense won both group stages of the competition but were still forced to play a semi-final and final against teams who had finished well below them.
They were beaten by Avai in the two-leg final.
As a player, Branco is widely remembered for his ferocious left-foot shot, scoring a memorable winner for Brazil in the 1994 World Cup quarter-final against Netherlands with a 35-metre free-kick.
Brazil went on to win the competition to claim their fourth world title. Branco won 75 caps in a 10-year international career and his club career took him to Brescia, Porto and Genoa
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