Garcia took Belgium to this month's World Cup quarter-finals, where they lost to eventual winners Spain, but his future had been in doubt after a largely unconvincing tournament.
The 62-year-old Frenchman’s deal runs out at the end of the month.
“Rudi Garcia has unquestionably played a key role in restoring the Belgian Red Devils,” said a statement from the association's sports director Vincent Mannaert.
“He was appointed national coach in a challenging sporting and financial context. Thanks in particular to his commitment and experience, team cohesion was restored and a strong result was achieved at the most recent World Cup,” he added.
“On behalf of the federation, I would like to warmly thank Rudi and his assistants for the past 18 months.
“Together with my team, I am currently preparing for a new cycle, including the appointment of a new national coach.”
FIFA World Cup 2026
The 2026 World Cup took place from June 11th to July 19th in the United States, Canada and Mexico. The tournament featured 48 national teams and was won by Spain, who beat Argentina in the final.
Full schedule and results | Group standings and bracket | Past winners of the tournament | Our team of the tournament | About the 2030 World Cup