Cheika is under fire after Australia endured a forgettable year, losing nine of its 13 Tests, a worrying run of form ahead of the 2019 Rugby World Cup.

While he has survived, Cheika will now report to Scott Johnson, who was appointed to a new director of rugby role.

Johnson was previously in the same position at Scotland Rugby, while he coached the nation on an interim basis from 2012-2014.

"It's a great move for Australian rugby and I know it will prove to be the best long-term structure for the game in this country," Cheika said via a statement. "I'm looking forward to working with Scott and finishing the work that I started by making Australians proud of our performance."

RA is also introducing a national selection panel for the Wallabies, with an independent selector to be appointed in early 2019 to join Cheika and Johnson.

It will also put in place a "fighting fund" to recruit and retain young talent, while RA and Super Rugby teams agreed principles to deliver an aligned national high performance model.

"We are confident Michael is the right man to lead the Wallabies to the World Cup and the appointment of Scott Johnson will support Michael and his coaching team as they prepare for the tournament in Japan next September," RA chief executive Raelene Castle said.

"In his review, Michael identified potential changes to the current structure and he and Scott will work their way through these recommendations."