Ange Postecoglou has stood down as Socceroos coach after deciding not to continue in the post until the 2018 World Cup finals in Russia.
The 52-year-old made the announcement at a media conference in Sydney on Wednesday, flanked by Football Federation Australia CEO David Gallop.
"It's been the toughest decision," Postecoglou said.
"It's not the ending I envisaged but it won't take away from how rich this experience has been."
Postecoglou was appointed Socceroos coach in October 2013, on a five-year contract, replacing Holger Osieck after the German was sacked following successive 6-0 defeats by Brazil and France.
He took Australia to the 2014 World Cup, where the team performed competitively in a tough group featuring Chile, the Netherlands and Spain.
Postecoglou and the team then were crowned 2015 AFC Asian Cup champions after winning the tournament on home soil.
"I love coaching Australian players," Postecoglou added. "I've often said to them when you make a choice in this country to play football and that's going to be your dream.
"You're choosing the hardest possible road and it takes enormous courage. That's why I love coaching Australian players."
FFA chief executive David Gallop was "disappointed" and "puzzled" by Postecoglou's decision, but respected his right to make it.
"I'm especially proud we showed that an Australian football coach could coach the Socceroos," Gallop said.
"In whatever you do I know you'll be successful and you'll also be a friend to football in Australia."
Gallop said in a statement -- issued by Football Federation Australia while the press conference was underway -- that it was hard to think of the Socceroos contesting the World Cup without Postecoglou leading the team.
"It's going to take some getting used to, especially for the players and the national team staff," Gallop said in the statement.
"But we always knew this day would come eventually, and we have been doing succession planning over the past year. We will not rush this process. The Socceroos will not play again until March next year at the earliest, so we have time to conduct a thorough process. With a guaranteed place in the World Cup, I am sure we will attract a strong field of candidates."
Postecoglou was quoted in the FFA statement as saying he appreciated both the support he had been given by the governing body, and the offer to discuss a contract extension beyond the World Cup, but the time had come to move on.
"It has been a privilege for me to coach my country's national team, to lead them at the 2014 World Cup, to win the Asian Cup in 2015, and now to have qualified for the World Cup next year. I said we would do it and we have done it..
"All this, however, has taken a toll on me both personally and professionally.
"I have invested all I can knowing how important a period it was for Australian football. It is with a heavy heart that I must now end the journey.
"To coach your own country is the greatest privilege, but it also has enormous responsibility.
"I feel now is the right time to pass on that responsibility to someone who will have the energy it requires. I owe this to the FFA, the players and the fans.
"I look forward to watching the team take on the world next year.
"I have no doubt that road ahead will have many special moments and no one will be happier than me watching and cheering from afar."