"The objectives set for the Euros were not achieved. We need a new momentum," he told a news conference.
A search was under way for a coach with international experience to take over before a friendly against Spain on Sept. 1 ahead of the World Cup qualifiers.
He thanked Wilmots for his achievements over the past four years and said an understanding had been reached over Wilmots contract, which had a compensation clause if he were sacked.
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The former Schalke midfielder, 47, took the Red Devils to the quarter-finals of the last World Cup and top of FIFA's world ranking chart with a team built around Chelsea's Eden Hazard and Manchester City pair Vincent Kompany and Kevin De Bruyne.
But a clueless and disjointed 3-1 defeat to Wales in the Euro 2016 quarters left critics calling for Wilmots' head and Belgian fans wondering what happened to the team that many had hoped would deliver the country's first major trophy.
(Reporting by Alastair Macdonald; Editing by Angus MacSwan)
