Israeli FA officials said former Hapoel Tel Aviv coach Eli Guttman would be officially named as soon as Fernandez's contract expired at the end of the year.
"Israeli FA chairman [Avi Luzon] presented the main points of the national coach's report and thanked him on behalf of the committee for his work," a statement by the Israeli FA said.
Fernandez was appointed in May 2010 to lead Israel in the Euro 2012 qualifiers but ended with a record of five wins, a draw and four losses in qualifying group F, eight points behind winners Greece.
The Frenchman also came in for a barrage of criticism from local media, which said he had failed to establish a stable squad and made frequent and unorthodox changes to his lineups.
Guttman has a reputation for being a methodical and meticulous tactician and is the only candidate up for consideration by the Israeli FA, committee members said.
"He is a certain candidate for the job and everybody's preferred choice," committee member Raviv Sapir told Channel 5, which said the executive committee was unanimous in wanting Guttman.
"There is no doubt that Guttman is a very worthy candidate and must lead the national team," Ariel Shaiman, another committee member said.
