The federation made the announcement in a statement, without going into detail, a day after Libya had been hammered 4-0 by the Democratic Republic of Congo in their Group A encounter in Kinshasa on Saturday.
Clemente had been due to leave the job at the end of year but been asked to stay for Libya's first two qualifying matches -- away in the Congo and home to Tunisia next month.
Libya have been banned from hosting internationals since the overthrow of Muammar Gaddafi five years ago left the country awash with armed militias, who often take the law into their own hands while central authorities struggle to impose authority.
Libya re-launched their league competition in May after a three-year hiatus but have suspended it several times since due to a lack of security.
The 66-year-old Clemente, who had been in charge for a little more than there years, is also the former coach of Spain, Serbia and Cameroon.
(Reporting by Mark Gleeson in Cape Town; Editing by John O'Brien)
