"I'm retiring as coach of the senior national team and will continue my work with the Federation's junior divisions," Lara told reporters on arrival from Asuncion where Colombia beat Paraguay 2-0 in their last qualifier on Wednesday.
Colombia, who last reached the finals in France in 1998, finished the South American qualifiers for the 2010 tournament in South Africa in seventh place with 23 points from 18 matches.
Only the top four, Brazil, Chile Paraguay and Argentina, have qualified while fifth-placed Uruguay meet Costa Rica, CONCACAF's fourth-placed team, in a playoff next month for another berth.
Colombian Football Federation (FCF) president Luis Bedoya confirmed the post of national coach was vacant. There is a lobby in Colombia to appoint a foreign coach.
"The (FCF) president will take the necessary decisions concerning the person they want to bring in (as new coach). I'm leaving," Lara said.
Lara took charge midway through the qualifiers, replacing Jorge Luis Pinto, who was sacked after losing 1-0 to Uruguay in Bogota and 4-0 to Chile in Santiago in September 2008.
He was at the helm for 10 matches, winning four and losing five. Colombia finished with six wins and 14 goals scored, the lowest total apart from bottom-placed Peru.
