Cameroon, four-times winners of the African Nations Cup, are in danger of missing out on a place at the next finals in South Africa after losing 2-0 to the tiny Atlantic archipelago nation in Praia on Saturday, in the first leg of the final round of qualifiers.
Lavagne had been suspended with full pay until the end of his contract in October, the television said.
Jean Paul Akono, who led Cameroon's squad to Olympic gold in Sydney 2000, has been appointed as interim coach, with Martin Ntoungou Mpile as assistant.
The appointment is Akono's second stint as head coach of the team after briefly holding the position from 2000 to 2001.
Cameroon, who host the Cape Verdians on Oct. 13 and have long been one of the dominant forces in African football, missed out on the last Nations Cup.
They were the first African country to reach the World Cup quarter-finals and won Olympic gold in Sydney in 2000.
However, instability at the helm of the team - 11 different coaches have been in charge since Akono was removed in 2001 - has been accompanied by a long stretch of poor form.
Administrative bungles have prompted players to strike over pay and led to key players being suspended. Striker Samuel Eto'o last month declined to make a comeback for the team after an eight-month suspension because of what he called "amateurish and bad management".
Angry fans demonstrated outside the offices of Cameroon's football federation after the defeat to Cape Verde, prompting authorities to deploy police and military personnel.