Joachim Loew, who was Klinsmann's assistant, has now taken charge.
An emotional Klinsmann denied resigning after two years as boss of Germany to coach the America national side.
He said: "This was not an easy decision. I feel burnt out. My great wish is to go home to be with my family, to return to a normal life with my family.
"I feel internally burned out. I owe it to myself to take a six-month holiday now. I won't do anything else. There is no contract with the USA team."
Lippi revealed he had decided to resign even before Italy reached the quarter-finals.
He said: "After the conclusion of an extraordinary professional and human experience during my time guiding this group of players, I believe my role as coach of the national team is over."
Former AC Milan midfielder Roberto Donadoni is being lined up to replace Lippi.