Frank Farina has ended his six-year reign as head coach of the Socceroos.
He will be replaced on an interim basis by national technical manager Ron Smith.
Farina yesterday said he did not want uncertainty about his role to impact on the team.
"Ever increasing speculation on my position is not something that I want to see affect the performance of the team, and the potential for that happening has led to this announcement," he said.
"We have the players and the backing to get us to the World Cup and no single element of our approach should be allowed to undermine that."
Calls for Farina to stand down escalated after the Socceroos left this month's Confederations Cup winless.
The team lost all three games and conceded 10 goals in the process, losing 4-3 to hosts Germany and 4-2 to Argentina before being humbled 2-0 by Tunisia.
FFA chief executive John O'Neill had made it clear he expected a good performance from Australia at the tournament.
Farina has had an uneasy relationship with O'Neill since the latter joined the FFA in February last year.
It reached a head in May when O'Neill called for Farina to seek anger management counselling following the coach's run-in with a television reporter after a "friendly" match against Iraq in Sydney.
Soccer: Farina quits Socceroos
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