Schelotto had been forced to coach from the stands after being appointed on Jan. 10 while awaiting for approval from UEFA. However, Palermo said earlier on Wednesday that UEFA had said it would not recognise the Argentine's credentials.
"Following the emergency caused by UEFA's failure to recognise the licence of coach Guillermo Barros Schelotto, I announce that I have handed the leadership of the first team to youth team coach Giovanni Bosi," said Palermo president Maurizio Zamparini in a statement.
Bosi was a journeyman professional who had stints with various clubs in the top three divisions of Italian football. His last senior coaching job was with Treviso in the third tier three years ago.
Palermo started the season under Giuseppe Iachini, who was fired in November and replaced by Davide Ballardini, who in turn was sacked in January after only seven games at the helm.
Bosi, Fabio Viviani and Giovanni Tedesco also had a stint on the bench during Schelotto's spell in charge.
All top flight coaches in Europe must hold a UEFA licence, or equivalent, under the UEFA coaching convention.
In the case of non-European coaches, a licence will only be issued if they have at least five years' experience with a top flight club or national side, however Schelotto had only three years' experience with Buenos Aires club Lanus.
"After a thorough evaluation of the case of Mr. Guillermo Schelotto, the UEFA...Panel confirmed that the latter’s diploma is not in line with UEFA’s minimum criteria," said UEFA in a letter to Palermo, which the club published on its website.
Palermo, 15th in Serie A, host Torino on Sunday.
(Reporting by Bartosz Dabrowski and Brian Homewood; Editing by Louise Ireland/Toby Davis)
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