"I am deeply hurt that the PCB officials said they have terminated my contract," Miandad said.
"I stepped down as coach after a mutual understanding with the Board."
PCB chairman Shaharyar Khan said at a news conference on Wednesday that Miandad's contract had been terminated and former England batsman Bob Woolmer has been appointed coach until 2007 World Cup.
"His contract has been terminated. We offered him to serve as national cricket advisor but he has declined," Khan said.
But Miandad, whose tenure was to expire in April next year, maintained he walked away from the job after he failed to get more say in team selection.
"I felt, if I am not getting what I want to make the team improve its performance, then its better to quit," he said.
"We reached a mutual understanding that they (PCB) will honor my remaining contractual terms and conditions and I will step down myself," Miandad said.
Pakistan's home series defeat against India two month's ago, their first on home soil, was seen as Miandad's downfall.
Miandad's refusal to share blame for the loss, as well as his demand for more power, forced the PCB to hire a foreigner, cricket officials said.
"Only time will tell if the PCB's decision to appoint Bob Woolmer as the national team coach is a correct one. It is not easy to coach a Pakistan team with so much at stake," Miandad said.
Tagged as "Mr Fix it" for his unconventional coaching, Miandad failed to survive any of his three tenures as coach.
He was first brought on as coach in August 1998, two years after his illustrious career of 124 Tests and 233 One-day matches finished.
But a fallout with senior players like Wasim Akram, Waqar Younis and Salim Malik forced him to quit just 15 days before the 1999 World Cup.
Brought back in March 2000, his second tenure also ended bitterly when he was removed after Pakistan's tour of New Zealand flopped in April 2001.
Last year Miandad was given the task of rebuilding the side after Pakistan failed to progress beyond the first round of the 2003 World Cup in South Africa.
Miandad denied he had problems with captain Inzamam-ul-Haq.
"I had no problem with the captain. Inzamam was very co-operative with me as were other boys. So there was no problem within the team.
"Our performance was also not bad at all. It was not a disaster to lose against India like it has been projected."