An FA statement read: "The Football Association can confirm that Fabio Capello has today resigned as England manager."
The FA's statement continued: "The discussions focused on the FA Board's decision to remove the England team captaincy from John Terry, and Fabio Capello's response through an Italian broadcast interview.
"In a meeting for over an hour, Fabio's resignation was accepted and he will leave the post of England manager with immediate effect."
Bernstein said: "I would like to stress that during [the] meeting and throughout his time as England manager, Fabio has conducted himself in an extremely professional manner.
"We have accepted Fabio's resignation, agreeing this is the right decision. We would like to thank Fabio for his work with the England team and wish him every success in the future."
A media conference with Bernstein and the Club England management team will take place at Wembley Stadium on Thursday at 1200 GMT.
Whilst the ins and outs of the John Terry captaincy issue rumble on, the main question is will this decision help or hinder England's chances of progressing in Euro 2012? It seems highly unlikey that a new head coach will give Terry the level of support that Capello has - Terry's international future may now be on the line as a new boss is sought.
In a twist of irony, hot favourite to succeed Capello - Harry Redknapp was cleared of any wrong doing in the tax evasion trial taking place for the last two weeks at Southwark Crown Court. The fact that Redknapp has emerged unscathed from that ordeal may well be enough to secure hime the top job in English football. Put it this way - he is 1/3 on at best with the bookies.
England fans everywhere will be hoping the Terry saga can be put to bed. With an important friendly at Wembley against Holland due later this month, the FA looks set to act swiftly. News of Redknapp's aquittal may have been music to their ears.