The 61-year-old concludes his six-year second term in the position after a shocking 1-0 home loss to Bahrain and a 0-0 draw with Indonesia.
Prior to their upcoming World Cup qualifying match against China at home on October 10, the Socceroos are currently seeking to name a long-term replacement.
“I said after our game against Indonesia that I had some decisions to make, and after deep reflection, my gut has told me it’s time for change,” Arnold stated in a statement.
“I’ve decided to step down in light of what’s best for Football Australia, the players, and the country.
I am really happy of the accomplishments made during my time in the position, and I have given it everything I have.”
Argentina became victorious from the World Cup in Qatar, where Arnold guided Australia to the quarterfinals. James Johnson, the chief executive of Football Australia, has lately backed the Australian team to resume their campaign.
Following the departure of Dutchman Guus Hiddink from Australia in 2006, the former Socceroo striker was named assistant coach in 2000 and took on the role of interim manager for a year.