Traore, 63, took his side to second place in their group, but they were easily trounced 3-0 by Ivory Coast in the first knockout round one week ago.
"Following a thorough analysis of Burkina Faso's participation in the Africa Cup of Nations, it has been decided to terminate collaboration with the national coach Brama Traore, as well as his entire technical staff," said a Burkinabe Football Federation statement on Wednesday.
"This decision follows results deemed to fall far short of the objectives set for the national team in this major continental competition. This poor performance has caused deep disappointment among supporters, stakeholders in national football, and governing bodies.
"As a reminder, the clearly established objective before the start of the 2025 AFCON was to reach at least the semi-finals, in line with the positive momentum and respectable performances achieved by the national team in previous editions," it continued.
Traore had been in charge for 22 months, and his dismissal follows that of Tunisia coach Sami Trabelsi, also fired after his side was eliminated from the round of 16 in Morocco.