Taylor, a former assistant with Scotland, joined the Wallabies ahead of the 2020 season. He bows out after Australia shipped 48 points against Argentina in a record-breaking loss.
In a statement, Rugby Australia said that following a discussion between Taylor and Wallabies coach Dave Rennie, “both parties felt the time was right for him to step away and commit his focus to some personal matters that he needs to prioritise at this point.”
Rennie said in the statement: “Matt is a great man with a strong work ethic, who is well respected within the Wallabies environment and we will miss him.”
Taylor said: “While this was an extremely difficult decision, I know it’s the right one for me and my family at this point in time.
“I’m looking forward to spending more time with them and look forward to getting back into coaching when the time is right.”
The Wallabies said they would announce any additions to the coaching staff in due course.