The Australian Rugby Union acted after a poor European tour saw the Wallabies lose to France, England and Wales last month with their only success coming against Ireland at Lansdowne Road.
ARU managing director Gary Flowers said: "Professional rugby is a result-based game - one win in nine matches is far from satisfactory.
"The decision to search for a new coach was only reached after carefully considering the information that has been gleaned from our review and consultation with key people.
"This is a very difficult decision, but the ARU strongly believes we must give the Wallabies a fresh start with a new coach who will give us the best possible chance of future success.
"While the ARU board has decided to search for a new coach, we also recognise that Eddie Jones has made an enormous contribution to the game.
"However, it was clear that we needed to act now on the position of head coach.
"We will now be able to move forward and get on with the job of searching for a high calibre head coach to lead a coaching team that will get the best out of Australia's elite rugby players.
"This is not an easy decision, but it is in the best interests of Australian rugby."