The former St. Louis Blues coach, who was released from hospital on Saturday, did not speak to the media, but issued a statement on Monday.
"It is with deep regret that I step down as head coach of Team Canada," Quenneville said. "I was honoured to have been asked to help represent my country.
"I know the team will do well under the leadership of Mike Babcock, Tom Renney and Mike Pelino and I wish them all the best in their bid to remain world champions.
Team Canada head coach Joel Quenneville was hospitalized Friday and will not coach at the world hockey championship.(CP File Photo)
"I am feeling better, and am looking forward to a much-needed rest with my family."
Canadian team doctor Ian Auld said Quenneville's status had improved since being hospitalized on Friday.
"Since his release (from hospital), his health has continued to improve," Auld said. "Following reassuring results from lab tests done overnight, he now has medical clearance to return home."
Team Canada general manager Jim Nill said Quenneville was suffering from extreme exhaustion and had difficulty with the jet lag and time difference.
Quenneville, 45, who was making only his second trip to Europe in his life, appeared tired when speaking to two Canadian reporters after practice Friday. It was later learned he had not slept in four days.
Considered one of the brightest coaches in the game, Quenneville's name has been linked to NHL head coaching jobs with Ottawa, Phoenix and the New York Rangers.
Babcock, head coach of the Anaheim Mighty Ducks, was promoted from assistant to head coach Saturday night, while former Hockey Canada coach Mike Pelino was flown in and added as an assistant coach.
Renney, the interim bench boss of the New York Rangers and a former national team coach, was elevated from assistant to associate coach.
Team Canada's next game is Tuesday against France. The Canadians tied Austria 2-2 in their tournament opener on Sunday.
with files from Canadian Press
