The Argentine coach of the Paraguayan national team, Gerardo Martino, stepped down on Friday after four years in the role.
The Paraguayan Football Association (APF) have named Francisco 'Chiqui' Arce, who represented the team at the 1998 and 2002 World Cups, as his replacement.
Martino enjoyed a successful 72-match reign at the helm after being appointed in 2007.
He led them to the quarter-finals of last year's World Cup in South Africa, where they narrowly lost to eventual winners Spain, and then oversaw their run to the final of the recent Copa America, which they lost to Uruguay.
Paraguay made it to the final in Argentina without winning a game, although they did eliminate Brazil on penalties in the last eight.
"I would like to thank the players for everything they have done for the prestige of Paraguayan football," he said in a press conference in Asuncion.
Martino, 48, had recently been linked to the Argentina job following the departure of Sergio Batista.
However, the Argentine Football Association named Alejandro Sabella as their new coach on Thursday.