"I am responsible for the defeat and has taken the decision to quit as the national coach with immediate effect," Dollah, 51, told reporters at KLIA after returning with the team late Thursday.
With the thrashing in the qualifying second round Asian Zone Group A match at the Mohamed Zayed Stadium in Abu Dhabi, Malaysia hit a new all-time low in their football history.
It was the worst result for Harimau Malaya since going down to New Zealand 8-2 in an international match played in Kuala Lumpur almost 50 years ago.
The team will meet Saudi Arabia on Tuesday in the qualifications.
Most of the players were not surprised with the decision except for Razman Roslan, who told Dollah to stay on until the match against Saudi Arabia.
"I spoke to FAM secretary-general Datuk Hamidin Mohd Amin and it went well. FAM accepted my resignation.
"As a coach, we want to end well but this happened."
Dollah said he made up his mind to quit after the match and said that the fans would not have accepted the result.
"This is football, focus is on the coach, I have to accept my fate.
"I expected defeat but not in that manner. I don't want to lie. My expectation was to lose just by a goal.
"You have to ask the players about their performance. I don't want to comment," he said.
Dollah's first achievement as coach was in 2003 when he won the Malaysia Cup with club side Selangor MPPJ.
He etched his name among Selangor fans when he guided the team to a triple in 2005 by winning the Premier League, FA Cup and Malaysia Cup.
In 2013, he helped Pahang lift the Malaysia Cup after 21 years by defeating Kelantan.
In June 2014, Dollah was appointed national coach and Malaysia was runners-up in the AFF Suzuki Cup.
However, results did not go his way after the tournament as Malaysia struggled against minnows, humiliated by war-torn Palestine 6-0 in an earlier qualifying match.
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