Sydney - Michael Cheika will survive the axe as Wallabies coach, but his powers will be curtailed with Scotland-based Scott Johnson appointed director of rugby above him, a report said on Friday.
Cheika has faced a mounting backlash from dismayed fans and former players after winning just four of Australia's 13 Tests this year.
Despite the dire results and a slide to sixth in the world rankings, Rugby Australia chief Raelene Castle has consistently backed him to take the team to the World Cup in Japan next year.
A board meeting of the governing body this week to assess the season, with Cheika in attendance, ended without a decision on his future.
Chairperson Cameron Clyne said his fate would be decided "ahead of Christmas".
The Sydney Daily Telegraph reported that as a compromise to Cheika staying, Scotland's director of rugby and former Wallabies assistant Johnson will assume a role above him.
It said Rugby Australia secretly met with the Sydney-born Johnson during the Wallabies recent tour of Europe and has been working on a deal to bring him home.
Johnson became the Scottish director of rugby in 2013 and last worked with Australia at the 2007 World Cup as attack coach under John Connolly.
Rugby Australia told AFP it was unable to comment other than "we haven't finalised the review process".
Cheika's fate has split the rugby world with Wallabies legend Matt Burke this week calling for him and his coaching staff to be sacked, describing his situation was "untenable".
But at the same time current Wallaby David Pocock threw his full support behind him.
"He's someone I've learned a huge amount off, got a lot of respect for and ultimately there's probably not a huge amount of value getting players talking about it because it's a decision for people higher up in the chain," he said.