The Wallabies failed to progress beyond pool play for the first time at the tournament after losses to Wales and Fiji in France.
Domestic media reported Jones told Rugby Australia on Friday he was willing to walk away from the Wallabies job, and terms were agreed Sunday night.
He will not receive a payout on the 5 million Australian dollar (US$3.2 million) contract when he became Australia coach for the second time in January after being dismissed by England.
“I feel disappointment about the fact that what we wanted to do in terms of changing the system hasn’t been able to happen in the short term,” Jones said. “I have a major feeling of disappointment.
“But I don’t feel any grievance towards anyone. I’ve really enjoyed coaching the players. The players have been fantastic. They just need a better environment to be training and playing in.”
Rugby Australia has begun a review of Australia’s World Cup performance but Jones now will leave before it is completed.
On Monday, speculation began on Jones' replacement. Local media suggested that outgoing New Zealand coach Ian Foster, who saw his team lose 12-11 to South Africa in the World Cup final in Paris on Saturday, is on the list.
Also mentioned were World Cup-winner Stephen Larkham and fellow former Wallabies assistant Dan McKellar.
Jones' appointment earlier this year to replace Dave Rennie as Wallabies coach had been hailed by the sport's national administators as a major turning point for rugby in Australia. The 63-year-old Jones was given oversight of the men’s and women’s games in Australia and charged with guiding the Wallabies to success in the 2027 World Cup in Australia.
His untimely departure is a major embarrassment to Rugby Australia. Jones' second stint as Wallabies coach — he led the team from 2001-2005, including to the final of the 2003 World Cup in Australia — has been dreadful.
The Wallabies had five straight losses heading into the World Cup, finishing last behind New Zealand, South Africa and Argentina in the Rugby Championship and losing the Bledisloe Cup series 2-0 to New Zealand.
Jones gambled on youth heading into the World Cup, leaving out experienced players such as flyhalf Quade Cooper and former captain Michael Hooper and including a number of untried youngsters. Still, Jones claimed prior to departure the Wallabies would win the World Cup.
Jones is in Britain where he will coach the Barbarians invitation side against Wales.
AP rugby: https://apnews.com/hub/rugby