Australia coach Michael Cheika says he will leave his role when his contract expires at the end of the year.

The Wallabies suffered a 40-16 defeat by England in the World Cup quarter-finals in Oita on Saturday.

Cheika said last year he would walk away if Australia did not win the World Cup but would not be drawn on his future immediately after the match.

"I always knew the answer in my head," said Cheika, who took over in 2014 and led Australia to the final in 2015.

"I just wanted to speak to my wife and tell a few people up there about it. I put my chips in earlier in the year when I told people 'no win, no play'.

"I'm the type of man who is always going to back what he says and I knew from the final whistle but I just wanted to give it that little bit time to cool down, talk to my people and then make it clear."