Off-contract Diles was adamant he was the man for the job going forward, but on Monday paid the price for this month's knock-out loss to Sydney FC.
AAP has confirmed the club opted not to renew Diles's contract, just 18 months after the Sydneysider took the reins, initially on an interim basis, in December 2024.
The Victory will now need to search for a third head coach in as many seasons since now-Socceroos boss Tony Popovic resigned at the end of the 2023-24 campaign.
Patrick Kisnorbo replaced him but departed just seven ALM games into a three-year deal to take up a role with Japanese club Yokohama F. Marinos in December 2024.
Diles, an assistant to Popovic and Kisnorbo, was named interim coach before earning the full-time role last January.
He managed to take the Victory to the 2024-25 grand final, which they lost to Melbourne City, before ending with a fourth-placed finish this year.
The 44-year-old also deserved credit for taking a punt on Juan Mata after the Spaniard's tough stint at Western Sydney, with the superstar playmaker arguably the player of the A-League Men season with five goals and 13 assists.
But in a cruel twist of fate, Diles's Victory were knocked out by a Sydney FC team led by new interim boss Kisnorbo, who has since steered the Sky Blues to the grand final.
Across his interim and full-time roles, Diles took the Victory to 20 wins, 13 draws and 17 losses.
The club's next boss will take charge in an era where A-League Men trophies have proved elusive for the Victory.
They last won the championship under Kevin Muscat in 2017-18 and the premiership under the same club great in 2014-15.
Popovic is the only manager to deliver men's silverware at the Victory in recent years, claiming the Australia Cup in 2022.
The Victory declined to comment when approached by AAP on Monday night.
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