Pahars intends to organize a press conference in April to explain his decision.
The LFF has expressed its gratitude to Pahars for his work with the national team and wishes him good luck in his coaching career.
Pahars was appointed head coach of the Latvian football team in August 2013, when Aleksandrs Starkovs resigned.
As reported, Pahars said during a press conference after yesterday's match that the Latvian Football Federation should begin looking for a new head coach.
''The way we played is something cannot happen. I do not know what happened to my players. Usually head coaches step down after such defeats,'' Pahars said.
''To be honest, I was ashamed of they way we playerd - especially taking into account our recent match against Switzerland, where we played quite well,'' he said.
''Those who play football understand that players can be tired or not completely ready to play, but the way we played is something which cannot be allowed. Looking forward, I believe that Latvian Football Federation should be looking for a new head coach. This is what I believe. It would be a bit odd if I stayed on as coach after such a match,'' Pahars added.
LETA also reported, in a friendly match in Tbilisi on Tuesday, Latvian national football team was soundly defeated by Georgia by a score of 0:5 (0:2).
Jano Ananidze and Giorgi Kvilitaia scored two goals each, and Giorgi Arabidze scored one goal.
At the moment, Latvia is ranked 111th in the FIFA rankings, while Georgia is ranked 126th.