This follows the unimpressive performance of the Walia Antelopes in the 2017 AFCON qualifiers, where their chances of making the final tournament in Gabon hang on the slimmest of margins.
Sahle replaced Portuguese Mariano Barreto in April 2015, but his rein has been blighted by a poor run of form in the AFCON and World Cup Qualifiers.
The former international came under heavy criticism after Ethiopia’s 7-1 drubbing against Algeria last March sounded the death knell.
The 49-year old guided Ethiopia to the finals of the Orange CHAN Rwanda 2016, but the Walias exited without a win and failing to go past the group stage. The Walias also finished third in the regional CECAFA Cup on home-soil last December.
Assistant coach Fasil Tekalegn and Goalkeeper’s coach Ali Redi have also been relieved of their positions with the technical team.
Meanwhile, the Federation is expected to name a new coach ahead of 2017 qualifier against Lesotho in June.
Ethiopia are five points shy of Group J leaders Algeria, who have 10 points, and must win against Lesotho and Seychelles in September to remain in contention for one of the two best runner-up spots.