The Spaniard, who led them to Nations League glory last summer, said it made no sense for him to continue in his post after the loss.
Speaking after the game, he said: "I came to Portugal to win the World Cup, and I think that without winning, it doesn't make sense to continue. The board and the president have the chance to choose their manager. My contract ends today, there's not much more to say.”
Despite the disjointed performance, which saw him persist with a 41-year-old Cristiano Ronaldo up front for the entirety of the match, Martinez insisted the tournament was not a failure.
He added: "We didn't fail, we lost a game against a favourite team, we played face to face, showed incredible talent.
"We won the Nations League on penalties, it's all about details between the top teams. Failing is not trying to win, and we tried until the last minute, gave everything, the players were incredible, exemplary. That's what makes you a winner. I hope Portugal's fans can remember everything that the coaching staff and I did.”
Appointed back in 2023, the former Belgium manager led his side to 32 wins in his 45 games.