The 60-year-old coach, who replaced Alireza Mansourian in the Ahvaz-based club, has canceled his contract with Foolad by mutual consent.
The Spaniard started his coaching career in Alicante in 1997 and has also coached Almeria, Levante and Albacete.
Foolad sits 10th in the 16-team table, five points above relegation zone.
Ex-Persepolis head coach Yahya Golmohammadi is a candidate to take charge of the Ahvaz-based team.