"I don't intend to part with Japan. I may leave Japan for now but my heart will always belong here," the 53 year old said.
"I will rest for a while and then think about my future.”
Zico has been involved in Japanese football for the past 15 years, first as a player with J-League side Kashima Antlers.
A veteran of three World Cups as a player he has repeatedly expressed his wish to coach a European club after Germany 2006.
His expected replacement is former Yugoslavian coach Ivica Osim who has also had experience in Japan in coaching JEF United Chiba.
"This is the only place I can come back to," the 65 year old said as talks continue regarding an offer of the coaching position of the Asian Champions.
Osim took the former Yugoslavia to the World Cup quarter finals in 1990, and has also had stints with club sides in Austria and Greece.
Despite the side’s poor showing at the 2006 World Cup Finals where they failed to a win a game, JFA president Saburo Kawabuchi has said the next Japan coach must follow Zico's policy of giving players the freedom to express themselves on the pitch, in contrast to previous coach Philippe Troussier's emphasis on rules and formalities.
Fans say "Thankyou Zico"
"Football must be beautiful and Japan can pursue the beautiful game on its own terms," Zico told a farewell party at the Japan Football Association (JFA) headquarters.
"I hope you gain the strength to reach the top of the world.
"I hope the players raise their levels by bearing in mind what they lack when they train themselves."
Japan will launch their 2007 Asian Cup defence with a qualifier against Yemen at home on August 16.