The 68-year-old manager told reporters on Monday that he was sorry for the loss and things had to end the way they did but “these things happen”
Hodgson who has been in charge for four years said it is now time for someone else to take over from him to oversee the progress of a ‘hungry and extremely talented group of players.’
The former England manager paid glowing tribute to his players whom he said had done fantastically and carried out everything asked of them.
Hodgson’s contract was up for renewal after this year’s Euro 2016 but the shock loss to Iceland has ended any such hopes. He leaves with a not so good record having won 33 of his 56 games in charge of the England squad.
The Football Association (FA) said in a statement they were disappointed by the premature elimination by Iceland and supported Hodgson’s decision to step aside.
“We had high hopes of progressing through to the latter stages of the competition and accept that we have not met our own expectations or those of the country.
“We back Roy Hodgson’s decision to step down as England manager and will discuss next steps imminently,” the FA said in a statement.