National broadcaster ABC said that "Australian football needs clarity, ambition, direction, rejuvenation".
The Dutchman, who took the Netherlands to the 2010 World Cup final, had been one of the leading foreign candidates to take on the coaching stint.
South Africa drew 1-1 with Australia in an international friendly, ahead of the Socceroos’ jetting off to Brazil. Bafana Bafana scored both goals.
The Socceroo fans would have won the game hands down on sheer spirit, but in the end they gave way to Germany in a humiliating 4-0 defeat.
Injured Galatasaray forward Harry Kewell was included in Australia’s 23-man World Cup squad containing 14 veterans from Germany 2006.
Australia are on the verge of qualifying for next year’s World Cup finals after a 2-0 victory over Uzbekistan on Wednesday.
Midfielder Teko Modise rifled home a second half equaliser to earn 2010 World Cup hosts SA a 2-2 draw with Australia in a friendly on Tuesday.
Time is fast running out for Bafana Bafana coach Joel Santana to get his under-performing players ready for the Confederations Cup next June.
Australian coach Pim Verbeek on Friday selected an all-European-based squad of 18 players for the upcoming friendly against South Africa in London.