Rugby Australia said Taylor, who joined the Wallabies set-up in 2020, had met with head coach Dave Rennie (58) and both agreed that it was the "right time" for him to leave and focus on "some personal matters".
"While this was an extremely difficult decision, I know it's the right one for me and my family at this point in time," Taylor, who was previously an assistant coach for Scotland and the Queensland Reds, said in a news release.
"I'm looking forward to spending more time with them and look forward to getting back into coaching when the time is right."
Rugby Australia did not announce an immediate replacement despite the Wallabies facing two home tests against world champions South Africa over the next few weeks.
"Matt is a great man with a strong work ethic, who is well respected within the Wallabies environment and we will miss him," Rennie added.
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