The Italian federation (FIGC) initially issued a statement saying that Ventura was "no longer" the coach without clarifying whether he had been sacked or resigned. An FIGC source, however, told Reuters that the 69-year-old had been fired.
The four-times world champions were held to a 0-0 draw at home by Sweden in the second leg of their European playoff on Monday, losing 1-0 on aggregate, and will miss the finals for the first time since 1958.
Unusually in Italy, the federation did not thank Ventura for his services, nor wish him well for the future.
FIGC president Carlo Tavecchio later told reporters that he had spoken to Ventura and "told him we no longer had need of his services, so as of today, Italy does not have a coach."
Many Italian newspapers also called for the resignation of Tavecchio following the World Cup fiasco, but in Wednesday's statement, the FIGC said he had declined to quit.
Instead, Tavecchio said he had called a meeting for Monday to discuss the future. "We have thought about some important coaches as next manager," he said.
Ventura replaced Antonio Conte following Euro 2016 and was initially given a two-year contract. In August, it was extended until the Euro 2020 tournament because the FIGC said it was happy with the team's progress.
On announcing Ventura's appointment, Tavecchio had described him as a "master of football".
Ventura has never won a major title or coached top tier teams such as AC Milan, Inter Milan or Juventus. He spent much of his career in the lower divisions, but enjoyed a long, steady career and had a reputation for nurturing young talent.
He also gained widespread respect following a five-year spell with Torino when he led them out of Serie B and to several decent finishes in the middle and upper half of Serie A.
Italy finished second in their European qualifying group behind Spain, forcing them into a playoff against Sweden for a place in Russia.
Ventura was in charge for 17 games with 10 wins, four draws and three defeats.
Apart from 1958, the only other occasion Italy missed the World Cup was the inaugural tournament in 1930 when, like many other European teams, they did not enter because of the difficulties of travelling to Uruguay.
(Reporting by Elvira Pollina; Writing by Brian Homewood; Editing by Crispian Balmer, Gavin Jones, Pritha Sarkar and Toby Davis)
