New Zealander Robbie Deans has been appointed as the first non-Australian coach of the Wallabies.
The 48-year-old was interviewed for the job after failing to land the same role with the All Blacks last week.
Deans, who will continue to coach the Canterbury Crusaders in next year's Super 14, has signed a four-year deal that ends after the 2011 World Cup.
"We see this as a new start for Australian rugby," said Australian Rugby Union chairman Peter McGrath.
"In terms of our playing ranks, we are on the doorstep of generational change. We believe Robbie Deans is the man to move us into that new era.
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"Robbie comes with a superb record and I am delighted to announce he will be joining the ARU. The ARU Board presented the selection panel with a brief to find the most outstanding candidate.
"We as a board consider this appointment satisfies that objective. The Australian public would expect nothing less from us."
The former All Blacks full-back replaces John Connolly, who stepped down after Australia's defeat by England in the quarter-finals of the World Cup.
Deans was favourite to take the All Blacks job but the NZ Rugby Union opted to stick with Graham Henry despite his team's World Cup failure.
"We believe it is only fair that he be given this opportunity"
Laurie Fisher, Alan Jones, Ewen McKenzie, John Muggleton and David Nucifora were also interviewed by the Australian selection panel.
Deans has built up an impressive coaching CV with the Crusaders, guiding them to four Super 12 and Super 14 titles, two other finals as well as a semi-final in eight seasons.
He was also an assistant to All Blacks coach John Mitchell from 2001-2003.
"In an ideal world, we would be able to retain all of our top coaches in this country," said NZRU chief executive Chris Moller.
"But we have seen over a number of years that the depth and talent of coaching in this country means we can't keep all of them coaching in New Zealand and still meet their aspirations for higher coaching opportunities.
"We believe it is only fair that he be given this opportunity, despite the obvious concern about losing one of our best coaches to another country's national side."
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