The Frenchman, who has been linked with Spurs following Harry Redknapp's departure, has turned down the offer of a new contract with the French Football Federation.
Blanc, who took charge of the national side after the disastrous 2010 World Cup campaign, led Les Bleus to the quarter-finals of Euro 2012, where they lost 2-0 to Spain.
The former Bordeaux boss held talks with FFF president Noel le Graet on Thursday and had been offered a new two-year contract, but he was told that he would have to reduce his coaching staff. On Saturday it emerged that he had decided to walk away from the position.
A statement on the FFF website read: "Within the period provided for reflection, Laurent Blanc, on Saturday contacted the President of the FFF, Noel Le Graet, to indicate his decision not to seek the renewal of his contract of national coach.
"Mr Le Graet has acknowledged and applauded the work of Laurent Blanc at the head of the France team since August 2010. The executive committee of the federation is meeting on Tuesday but no comments will be made by the FFF and its president before the press conference scheduled at the conclusion of this work session.''
Blanc, a World Cup and European Championship winner during his playing career, had overseen a 23-game unbeaten run that ended with a surprise 2-0 defeat to Sweden in the final group game of this summer's tournament.
Marseille coach Didier Deschamps, who captained France to glory in 1998 and 2000, is believed to be the leading contender for the position. UEFA president Michel Platini said on Saturday afternoon that he welcomed Deschamps' candidature.
"If Laurent Blanc [leaves] it is a shame because he had indicated his wish to continue, but Didier Deschamps is among the very good coaches," Platini said.
"It is the FFF president who chooses. I do not think we have bad players. Progress has been made. We have potential but it is our place in the quarter-finals. Anyway, Didier Deschamps does know the team."
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