The former Ajax coach insists that the 31-year-old defender has played his final match for his country after refusing to play against Italy
The FC Nordsjaelland left-back had originally been named as a substitute in the World Cup qualifier against Italy after Olsen picked Simon Poulsen ahead of him. However, after Poulsen suffered an injury in the warm-up, Mtiliga refused to play.
Speaking to Reuters, Olsen explained his anger at the 31-year-old, who has been capped six times by his country.
"I have been in football for 40 years but I've never experienced anything like this. He let his team-mates down," he said.
"I asked Patrick Mtiliga to warm up but he was so disappointed by our decision [to start Poulsen] that he said he couldn't play an international match.
"I immediately asked him to leave the dressing room and he has played his last international."
Denmark crashed to a 3-1 defeat against Cesare Prandelli's side and now find themselves in a real struggle to qualify for Brazil 2014, having mustered only two points from their first three matches.