Arce led the team to five wins and 10 defeats after taking charge of the Guaranies for a second time in August last year, reports Xinhua news agency.
"The decision was made on Saturday. I spoke on the phone with the (APF) president (Robert Harrison) and offered to help in the future," Arce was quoted as saying by the local press.
He said he had received an offer to coach in Brazil, without revealing the name of the club.
Paraguay missed a chance to qualify for football's showpiece tournament in Russia by losing their final qualifier at home to Venezuela in October. A victory would have earned the team a playoff spot.
Arce also coached Paraguay from September 2011 to June 2012.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
About VDC
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.