The Scots mustered three points from a possible nine in Group C to end up behind Brazil and Morocco, with a minus three goal difference.
That was not enough to secure a place among the eight best third-placed teams who move through to the last 32.
Soon after Croatia's 2-1 win over Ghana on Saturday night confirmed Scotland's wait for a first qualification from the group stages of a major tournament would continue, a statement on the national team's official X (Twitter) account read: "Scotland men's head coach Steve Clarke has stepped down from his role.
"Our most successful national team head coach has called time on his seven years in charge following our participation at the FIFA World Cup 2026."
Clarke led Scotland to three out of the last four major tournaments and it was the national team's first appearance in the World Cup finals since 1998.
In a lengthy open letter to supporters on the Scottish Football Association's website, the 62-year-old said: "The most emotional part of this goodbye is for my players, without whom we wouldn't have had any of the memories that we've accumulated from 2019 until now.
"They deserve all the praise and adulation that they receive and it was truly an honour to be called their gaffer.
"Thanks for having me and good luck to my successor."
Ian Maxwell, Scottish FA chief executive, thanked Clarke for his "record-breaking contribution".
"While we are all disappointed to have exited the World Cup at the group stage, we must not lose sight of the undeniable progress made during Steve's seven years in charge," Maxwell said.
"From starting as a pot four team in 2019 to topping our World Cup qualifying group, he has more than delivered on the remit to take Scotland back to a major tournament.
"We thank Steve for his record-breaking contribution and know that when the disappointment of World Cup elimination subsides, the Scotland supporters will be thankful for the memories of marching with pride at major tournaments once again."
The Scottish FA are looking for a new boss ahead of the Nations League campaign which begins in September.
Scotland started the campaign with a hard-fought 1-0 win over Haiti then lost 1-0 to Morocco, both in at Boston Stadium.
A 3-0 defeat by Brazil in Miami then left Clarke's side needing a series of favours from other teams, which they did not receive.
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