FFA chief executive David Gallop said assistant coach Aurelio Vidmar will act as caretaker coach for Australia's match against Canada in London this Tuesday.
Gallop said Head of National Performance Luke Casserly and the National Technical Director Han Berger will be charged with finding a new head coach.
The most popular appointment with Australian fans would be the return of Guus Hiddink, who guided Australia to a second-round appearance at the 2006 World Cup, losing only to a late goal by eventual champion Italy. The Dutchman has been out of work since leaving Russian club Anzhi Makhachkala in July.
Lowy has appointed European coaches under his current reign, but prominent local A-League coaches Ange Postecoglou, Tony Popovic and Graham Arnold are also considered candidates.
Friday's crushing defeat at the Parc des Princes in which France led 4-0 inside 30 minutes and could well have scored in double figures led to an outpouring of anger from fans and former players.
Former Australia international Robbie Slater tweeted "worst position we've ever been in. Embarrassing! I feel for the young players."
The 65-year-old Osieck was appointed national coach in 2010 and guided Australia to its third-straight World Cup. But their form during this year's qualifying campaign was often unconvincing and their successive 6-0 defeats ended his three-year term.
Asked about his future immediately after Friday's defeat and before his firing was confirmed Osieck seemed to have accepted he would be removed.
"Two heavy losses of that extent gives some food for discussion. The merits of the past are forgotten when this happens."
Current Australia midfielder Tim Cahill showed some sympathy for his sacked coach, tweeting "want to say thankyou to Holger for getting us to our third World Cup. Is this a first, to get us to WC and get the sack. Sad day for football in Oz."
Osieck, who was an assistant to manager Franz Beckenbauer when Germany won the 1990 World Cup, took over as Australia coach in 2010, shortly after its exit in the group stages of that year's World Cup.
It's qualification for the 2014 World Cup in Brazil was in jeopardy after a loss to Jordan but it finally sealed its place with an 83rd-minute goal to Josh Kennedy in its final qualifying match, at home to Iraq.
Osieck had been widely criticized for sticking with aging players such as Mark Schwarzer, Cahill, Lucas Neill and Mark Bresciano and others of the so-called "Golden Generation" which got Australia to the 2006 and 2010 World Cups.
Osieck's removal continued a bad recent run for coach of Australian national teams. Cricket coach Mickey Arthur and rugby coach Robbie Deans had also been removed in the second half of 2013.
-AP
