Germany coach Julian Nagelsmann has resigned after his side's stunning World Cup round-of-32 defeat to Paraguay, according to multiple media reports Friday.

Nagelsmann, whose contract ran through the 2028 European Championship, agreed to step down at the request of the German Football Federation (DFB), Bild and Sky Germany reported.

His departure paves the way for former Liverpool manager Jurgen Klopp, who is reportedly the DFB's preferred candidate to succeed him.

Klopp, who left Liverpool in 2024 after a highly successful tenure that included UEFA Champions League and Premier League titles, is currently Red Bull's global head of football. However, reports say his contract includes a release clause that would allow him to take over the Germany job.

The 59-year-old remains hugely popular in Germany and has worked as a television pundit during the country's World Cup coverage.

Nagelsmann took part in a three-hour meeting at DFB headquarters in Frankfurt on Thursday, where he was reportedly offered a severance package of 7 million euros ($8 million), roughly equivalent to one year's salary.

If confirmed, Nagelsmann's departure would make the 38-year-old only the second national team coach in German history to be dismissed, following Hansi Flick's exit in 2023.

Germany were eliminated in a penalty shootout by Paraguay in Boston on Monday after the match finished 1-1 following extra time. It marked the first time Germany had lost a World Cup match on penalties.

The four-time World Cup champions also exited in the group stage at the 2018 World Cup in Russia and the 2022 tournament in Qatar. Germany have not won a World Cup knockout match or kept a clean sheet at the tournament since defeating Argentina 1-0 in the 2014 final in Brazil.