Ex-Barcelona and St Mirren midfielder Munoz met his demise after the weekend’s 4-0 loss to FC Thun but will remain with the club in a scouting role.
"Following FC Sion's disastrous performance at Thun and considering the obvious lack of commitment from the team, the club's management has decided to hand over responsiblity to the players," the club announced in a statement.
"To carry this out, from today and until further notice, they will manage their own affairs. The management gives responsibility for the team to captain Gennaro Gattuso.
"Victor Munoz himself is taking a step back."