Iceland coach Lars Lagerback announced on Monday he will step down from his post after Euro 2016, having led the country to their first appearance at a major tournament.

"It was a difficult decision. I've had four fantastic years. The problem is I was born a long time ago and I must realise I'm not getting any younger," said Lagerback, 67, in quotes published by Swedish daily Dagens Nyheter.

Iceland were ranked 108th in the world when Lagerback took over in October 2011, but the Swede has overseen a remarkable rise with the country climbing to 35th and qualifying for the European Championship ahead of the Netherlands.

Heimir Hallgrimsson, who is officially joint coach alongside Lagerback after moving up from his assistant role in 2014, is expected to be named as the Swede's successor.

Iceland have been drawn alongside Portugal, Austria and Hungary in Group F.