Canberra - Stephen Larkham was axed as Wallabies assistant coach on Monday after disagreements with Michael Cheika over strategy and game philosophy just months away from the Rugby World Cup in Japan.
Rugby Australia said he will move to a new role as national high performance coach advisor, focusing on mentoring and skills development across the Sevens and junior teams.
Larkham, a former World Cup-winning flyhalf, said he was "disappointed".
"Ultimately Michael is responsible for the performance of the team," he said of head coach Cheika.
"We have differences in attacking strategy and overall game philosophy. We couldn't agree on these key points and it is in the best interest of the team that they receive clear and consistent messages from their coaches."
"I am obviously disappointed with this outcome as I had chosen to pursue the experience of taking the Wallabies through to the World Cup," he added.
The move comes less than two months after Cheika himself survived the axe and had his powers curtailed over an alarming slide in the team's form.
From March, he will have to report to Scott Johnson in his newly-created role of director of rugby.
Cheika must also now work with a three-man selection panel - himself, Johnson and an independent.
The move followed a mounting backlash from dismayed fans and former players after the Wallabies won just four of their 13 Tests last year - their worst campaign in decades.
Rugby Australia chief executive Raelene Castle said she was glad Larkham was staying on in another role.
"He was one of our greatest ever Wallabies and has developed a strong depth of experience during his coaching roles with the Brumbies and Wallabies," she said.
"It was very important from Rugby Australia's perspective to retain Stephen's services and to ensure his experience is used to grow and develop coaches and players in our next generation."