Nawalka, 60, led his nation to bottom of Group H after losing to Senegal and Colombia before a consolation win over Japan.
The Polish FA announced the news on Tuesday, saying in a statement they are going in a "new" direction.
The statement read: "We have decided that Adam Nawalka will remain Poland's team coach until July 30 and. "After that day we will be looking for a new coach.
We will try to build a national team in a new way." Having been knocked out, Nawalka had his say on the abysmal showing in Russia.
Nawalka claimed: "Of course I feel responsible that we did not meet expectations, we did not meet our plans, ambitions, our fans' expectations.
"We are disappointed, and I take full responsibility for that."