Ange Postecoglou will become the first Australian coach for four decades to lead the Socceroos into the World Cup finals next year after being confirmed as the successor to Holger Osieck.

The 48-year-old won out in a three-horse race with former Socceroos coach Graham Arnold and Western Sydney Wanderers manager Tony Popovic after FFA chairman Frank Lowy indicated he wanted an Australian for the job.

Postecoglou was handed a five-year contract which will take him through a period including next year's finals in Brazil and the 2015 Asian Cup, which Australia will host, as well as through qualifying for the 2018 World Cup in Russia.

"We have faith in him, we know that he's a good guy in football terms," Lowy told reporters in Sydney.

"There's plenty of work to be done obviously. Day one for me will start on Monday" - Ange Postecoglou

"He's the right person for us at this stage of our development. In the last 10 years, we had coaches from overseas. That was the time for it then. Now it's time for an Australian coach."

Former national youth team coach, Postecoglou won back-to-back A-league titles with the Brisbane Roar before a move last year to Melbourne Victory, who earlier on Wednesday announced they had released him to take up the national job.

His first task will be to restore some confidence to the Socceroos squad after the humbling back-to-back 6-0 defeats to Brazil and France which brought about the sacking of German Osieck.

Osieck looked certain to follow Dutchmen Guus Hiddink (2006) and Pim Verbeek (2010) by taking charge of the Australian squad at next year's World Cup finals after sealing qualification in June.

A lacklustre qualification campaign followed by the heavy defeats in friendlies, combined with his failure to rejuvenate an ageing team, led to the unpopular German's exit, however.

"I am looking forward to the days and years ahead," Postecoglou said. "I understand where we currently sit and what needs to be done.

"There's plenty of work to be done obviously. Day one for me will start on Monday."