Capello was to leave the England job after five years in charge following this summer's European Championship, but the recent dispute with the Football Association over their decision to strip John Terry of the captaincy led to the Italian's surprise exit last night.
"Capello shock resignation," ran Gazzetta dello Sport's headline, which added: "The Italian tactician has felt betrayed by the federation.
"He was the coach since 2007 and leaves England four months before Euro 2012."
Gazzetta says the veteran coach will have no problem finding a new job.
Capello, who has enjoyed successful spells at Juventus, Roma and AC Milan, has been linked with Inter Milan since last summer.
Russian side Anzhi Makhachkala are also reportedly keen to acquire his services.
"Beware of (Inter Milan president Massimo) Moratti and Anzhi," Gazzetta warned.
"There is also the possibility of (Juve president Andrea) Agnelli (offering the manager's role)."
National newspaper Il Messaggero and Rome-based Corriere dello Sport write that Capello's departure was due to the controversy about Terry, who awaits trial for allegedly racially abusing QPR defender Anton Ferdinand.
Il Messaggero's headline was: "Capello resigns from the England federation; Dispute with the federation regarding Terry racism."
The headline in Corriere dello Sport read: "Capello resigns. The relationship is interrupted due to the Terry case. Rumours link him to Inter and Anzhi."
Tuttosport, based in Turin, suggested Manchester United as a possible destination for the 65-year-old.
"Capello shock, goodbye England," ran its headline, which added "Inter and Manchester (United) on him."
National newspaper La Repubblica welcomed Capello's availability.
Its front page read: "Capello available on the market: Goodbye England."
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