Under Dalic's tenure, Croatia finished runners-up at the 2018 World Cup and third in the 2022 edition in Qatar, but the team exited the tournament without a medal this time around.
"When I took over the national team, I believed in the players' quality and in myself, but I didn't dare dream that we'd achieve everything we have over these nearly nine years," Dalic said.
"I can't describe how proud I am of every victory, of qualifying for major tournaments, of the three medals, of those great nights in Croatian football like when we beat England or Brazil at World Cups."
Following his appointment in 2017, Dalic led Croatia in 111 matches, recording 62 wins. His team were also runners-up in the 2022-23 UEFA Nations League.
In this year's World Cup campaign, the 59-year-old's side advanced to the round of 32 after finishing second in Group L, despite a 4-2 defeat by England, a narrow 1-0 win over Panama in which they managed only two shots on target, and a victory over Ghana.
But their campaign ended with a 2-1 defeat by Portugal, after which Dali criticised what he described as poor officiating, citing a VAR-awarded penalty and a late offside decision that ruled out Josko Gvardiol's stoppage-time equaliser, though he said refereeing was not an excuse for Croatia's World Cup exit.
"Head coach, thank you for everything – the victories, the achievements, the qualifying berths, the medals, the unity, the respect, and your unwavering commitment to fight for Croatia, both on and off the pitch," the Croatian Football Federation said in a statement.