Australia's Socceroos are ranked 16th in the world following the release of FIFA's latest rankings.
It is the highest Australia has ever been placed in FIFA's international ratings system which ranks 203 member nations of FIFA.
They are ahead of Portugal, Uruguay and Czech Republic.
"We are delighted at this news," Football Federation Australia CEO Ben Buckley said.
"Rankings are not the 'be all and end all' of football but they are certainly an indicator of our progress.
"The more competitive games we play, the greater the opportunity to improve our position in the world rankings and the more match hardened the team becomes.
"This is a great reward for the Socceroos' form in the qualifying rounds for the 2010 World Cup.
"Once again, we congratulate Pim Verbeek and the players for their efforts."
The Socceroos became the second team to qualify for the World Cup excluding host nation South Africa in early June and finished the fourth stage of qualification with six wins and two draws against strong rivals Japan, Qatar, Bahrain and Uzbekistan.
Buckley said he had recently returned from a brief trip to South Africa and said that it would be a "fantastic" tournament.
"We can't speak highly enough of the facilities we visited, the people we met and the atmosphere generated by local supporters at the games," he said.
Australia will know its opponents in the group stage at the final draw in Cape Town on December 4.
England have slipped a place in the world rankings to seventh.
Guus Hiddink's Russia climb three places to sixth, relegating Fabio Capello's side a position despite a perfect record in World Cup qualifying.
At the top, Brazil have toppled Spain following their Confederations Cup triumph in South Africa.
FIFA's top 10: 1 Brazil, 2 Spain, 3 Netherlands 4 Italy, 5 Germany, 6 Russia, 7 England, 8 Argentina, 9 France, 10 Croatia.
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