Larkham has been sacked from his role as the Wallabies' attack coach and will be transitioned into a new job as the national high performance coach advisor.

His exit from the Wallabies set up has been expected for some time after calls for major changes, but many were surprised with Larkham's blunt assessment of the situation.

Larkham, a Wallabies World Cup winner and two-time Super Rugby champion with the ACT Brumbies, revealed tensions within the Wallabies set up.

"Ultimately Michael is responsible for the performance of the team. We have differences in attacking strategy and overall game philosophy," Larkham said.

"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, however I am pleased to be able to continue coaching and contributing to Australian rugby in this new role."

Cheika survived calls from his head after the Wallabies worst year since 1958 last season, winning just four of 13 internationals.

It was instead Larkham, who has been in charge of the attack since 2015, and Haydn Masters who have been jettisoned from the national set up.

The decision has potential to cause tension in the playing group. Many in the team could see Larkham being left out of attacking plans and feel like he has been treated unfairly.

There's no doubt the Wallabies' attack has stuttered in the past 12 months, but defensive records were also poor and it's understood Larkham didn't have the freedom to implement the things he felt were needed.

It has led to Larkham moving into a newly created role at Rugby Australia, starting immediately after Cheika decided he did not want him as part of the Wallabies' coaching team.

Larkham will instead focus on coach mentoring, coaching and skills development across the Australian sevens program, junior Wallabies, state under-20s academies and the Wallaroos.

As Rugby Australia chief executive Raelene Castle said at Monday's announcement: "It's not where we all wanted to be.

"When you've got two coaches with great experience and really good depth of knowledge, whether it be attack or defence, you want to try to work those things out.

"You also don't want everyone to agree all the time, you need challenge and differences of opinions to make sure that with the final outcome you're growing and developing it.

"But ultimately they didn't think the core elements of attack were aligned and they believed, or Michael believed, it was the right thing to do to move on."

It is unclear if Larkham will have any involvement with the Super Rugby franchises but it is unlikely he will be the next Wallabies coach despite Cheika previously annointing him as the next in line.

Cheika is expected to stand down after the World Cup, while Scott Johnson has been appointed to a director of rugby role.

The Sydney Morning Herald revealed last year Cheika offered Larkham as the fall guy at a board meeting, where his position was being reviewed.

The Wallabies coaching set up meant Larkham had little input into the attacking strategies as the Wallabies averaged just 19.15 points per game.

"It's been difficult for him personally and professionally but he also recognises that over a long term coaching career there wouldn't be an international level coach that has [not] had a change in coaching opportunity put to them at some stage of his career," Castle said.

"It's not where we all wanted to be but we are and we think we've delivered Stephen a genuine transition into a new role and, equally, a support network that will help him secure his next head coaching role.

"Instead of perhaps previously, in this environments, where we've just sacked them and cast them aside and left them to their own devices."