USA failed to reach the World Cup for the first time since 1986 after suffering a dreadful 2-1 loss at Trinidad and Tobago on Wednesday (AEDT).
And that significant blow has resulted in the end of Arena's second stint in charge of the national side, which began last November and included a Gold Cup triumph in July.
As well as saying he was unsure what the future holds for him personally, Arena, who released a statement to US Soccer, insisted he was thankful for his second opportunity to lead USA, despite the massive disappointment.
"It is the greatest privilege for any coach to manage their country's national team, and as I leave that role today I am honoured and grateful to have had that opportunity twice in my career," said the 66-year-old.
"When I took the job last November, I knew there was a great challenge ahead, probably more than most people could appreciate.
"Everyone involved in the program gave everything they had for the last 11 months and, in the end, we came up short. No excuses. We didn't get the job done, and I accept responsibility.
"This certainly is a major setback for the senior men's national team program, and questions rightly should be asked about how we can improve. No doubt this process already has started and will continue so that US Soccer can progress.
"Having said that, it also is important to recognise the tremendous growth and accomplishments we have achieved over the past two decades in all areas, including player development, coaching education and a stable domestic professional league.
"This work is ongoing and despite the result in Trinidad, the sport is on the right path. By working together, I am confident soccer in this country will continue to grow in the years and decades ahead."
Arena's first stint was from 1998 to 2006, where he led the country to two World Cups and reached the quarter-finals in the South Korea and Japan 2002 tournament, as well as winning the first two of his three Gold Cups as USA boss.
He said: "Obviously the biggest disappointment is for our fans. As a person involved in the sport for more than 40 years, to see how support for soccer in the United States has grown is incredibly gratifying.
"I believe I speak for everyone involved in the game in thanking all of you for your passion and commitment, and I hope you maintain your steadfast support of US soccer.
"While this is a difficult time, I maintain a fierce belief that we are heading in the right direction."