New Zealander Deans, Australia's first foreign coach, departs after five and a-half years in charge of the Wallabies and in the wake of their disappointing 2-1 series defeat by the British and Irish Lions.
Ewen McKenzie, the outgoing coach of Super Rugby team Queensland Reds, is expected to be named as Australia's new coach when the ARU announces Deans's replacement at a media conference in Brisbane at 2pm (local time).
Deans, the longest-serving coach of Australia's national rugby team, had advised ARU boss Bill Pulver of his decision to step down late on Monday, the ARU said in a statement.
"I wish to take this opportunity to thank everyone involved in Australian rugby for their support through the duration of my tenure," Deans, 53, said in the statement.
"It has been a rewarding five years and I am proud of all that we have achieved.
"Most especially I would like to thank the players for their efforts and wish them all the best going forward."
Despite the official line, local rugby pundits are unlikely to believe Deans stepped down of his own accord, having been under enormous pressure to deliver a series victory against the Lions.
Pulver hinted as much in the statement, by saying a "coaching review process" had been ongoing throughout 2013.
PERFECT EXCUSE
The series loss to the Lions, capped by a thumping 41-16 defeat in the Sydney decider on Saturday, offered the perfect excuse for the ARU to strike.
McKenzie, a popular local choice and successful at provincial level having taken Queensland to their maiden Super Rugby title in 2011, put his hand up for the role earlier in the year.
He had beaten out World Cup-winning coach Jake White, now mentor of the ACT Brumbies, for the role, local media reported on Monday.
Softly-spoken and unfailingly cagey, Deans never endeared himself to a sceptical Australian public weary of New Zealand's dominance over the Wallabies throughout the past decade.
Although handed a contract extension prior to the 2011 World Cup, Deans faced almost immediate calls for his head when Australia exited in the semi-finals, a performance many Down Under regarded as an under achievement.
After a shock loss to Scotland on home soil last year, Deans held on to his job by guiding the Wallabies to a 3-0 whitewash of Wales.
TOP RANKING
Injuries put paid to the team's hopes of winning the inaugural four-nation Rugby Championship, but Australia finished the season with a successful tour of Europe, marred only by a heavy loss to France.
The British and Irish Lions series was universally regarded as Deans's last stand, however, given his failure to dislodge the All Blacks from the top of the world rankings.
Before Saturday's loss in the series-decider in Sydney, Deans's standing was undermined by disciplinary problems within the Wallabies camp, with young playmakers James O'Connor and Kurtley Beale embarrassing the team by being photographed at a fast food outlet at 4am days before the second test.
The pair escaped punishment at the selection table, leaving Deans appearing soft on discipline and all-too-willing to coddle favourites.
