FFA chairman Chris Nikou and chief executive David Gallop confirmed the decision at a media conference in Sydney on Saturday.
Gallop said the move was based on the results of two confidential surveys as well as discussions with players, staff and coaches, and "we no longer feel confident Alen is the right person to lead the team and the staff".
Stajcic took over the Matildas top job in 2014 when Hesterine de Reus was sacked after a player revolt.
He has since guided Australia through arguably their most successful period which has included runs to the quarter-finals of the 2015 World Cup and 2016 Olympics, as well as climbing to as high as fourth on the FIFA World Rankings.
The Matildas are one of the top contenders leading into the Women's World Cup but the departure of Stajcic is sure to throw a major spanner in the works.
The FFA will now be in a race against the clock to find coach to lead Australia's women's team through their busy upcoming schedule and the World Cup.
Australia's preparations are expected to step up a gear next month as they host New Zealand, Korea Republic and Argentina during the Cup of Nations tournament to be played across three matchdays in Sydney, Melbourne and Brisbane.
They are also locked in to take on reigning World Champions United States in Colorado on April 8.
The Matildas begin their World Cup campaign against Italy in Valenciennes on June 9 before taking on Brazil and Jamaica in their other group games.