PCB said in a statement that the team management wanted Waqar as bowling coach only for Tests series in South Africa and the board, in consultation with the team management, has the prerogative which official has to be with the team and for how long.
Waqar resigned from his post in protest, saying that PCB chairman's insulting and unfair attitude forced him to quit.
The 35-year-old former fast bowler announced his decision hours before he was to leave with batsman Mohammad Yousuf to join the squad in South Africa, where Pakistan are due to play three Tests and five One-day internationals.
Waqar, who played 87 Tests and 262 One-day matches for Pakistan until 2004, was appointed bowling coach in 2006 on a one year contract, which was to expire in April this year.
''PCB's bowling coach Waqar Younis reached Lahore on Saturday evening after an un-authorized absence of 12 days and thought that his presence with the team should have been ensured during the ODI series in South Africa and not just the Test matches,'' PCB said in a statement through its Director Cricket Operations Salim Altaf.
Waqar had gone to perform Hajj late last month with Mohammad Yousuf and other cricketers. He returned to Lahore on Saturday, handing in his resignation later that evening.
''Whereas it is the prerogative of the board in consultation with the team management that which official has to be with the team and for how long. This decision is taken purely in the larger interest of Pakistan Cricket and team's requirement.
The management feels that Waqar has very little contribution in the past as far as the shorter version of the game is concerned,'' the statement said.
''PCB treats all its contractual staff/consultants as professionals but regrets to mention that Waqar has failed to behave in a professional manner and has clearly violated the discipline and breached the contract.
''Waqar intimated the board on Saturday evening about his decision to quit in a burst of anger and the board only respected his decision by accepting the same although it had full commitment to honour the contract till it expired after the end of World Cup in April 2007.
''The PCB respects all its employees, players and consultants but would not tolerate indiscipline and arrogance,'' the statement said.
Waqar has also criticised captain Inzamam-ul-Haq for not personally telling him of the decision to appoint Mushtaq Ahmed as assistant coach.
''Inzamam has kept regular contact with Saeed Anwar (former Test opener) who was with me during Hajj, but he never spoke to me about the decision despite knowing that I was staying with Saeed. Inzamam could have informed me about the decision and taken me into confidence but I believe they (Inzamam and Bob Woolmer) are more comfortable with Mushtaq,'' he was quoted as saying by the Dawn newspaper.