Razvan Burleanu said the FRF had agreed with 66-year-old Iordanescu to part ways after Romania's failure to make it past the European Championship group stages. They finished bottom in Group A after losing to hosts France and Albania, and drawing with Switzerland.
"I want to thank Iordanescu for taking a great responsibility after the departure of (former coach) Victor Piturca and leading us to a first major tournament in eight years," Burleanu told a news conference.
In October 2014, Iordanescu returned to soccer management by taking over as Romania coach for a third time after not coaching a team since 2006.
Iordanescu, who moved into politics several years ago and became a member of the Romanian senate, the upper house in the bicameral parliament of the Black Sea state, has led the national team on two previous occasions.
The former Romania striker guided them to the 1994 World Cup quarter-finals, their greatest achievement in football, the 1996 European Championship and the 1998 World Cup during his five-year spell in the job.
After Romania's memorable 3-2 win over Argentina in 1994, Iordanescu was promoted from army colonel to general.
Burleanu said he will announce Iordanescu's successor at the end of the European Championship, adding that former Steaua Bucharest and Saudi Arabia coach Cosmin Olaroiu had turned down an offer to take the job.
"We want a coach with more than 10 years experience at high level," Burleanu said.
"Someone who has won trophies and will be able to lead the national team to the (2018) World Cup though the qualifying campaign," he added.
Romania have been drawn in Group E alongside Denmark, Poland, Montenegro, Armenia and Kazakhstan.