Cricket Australia said Monday the Tasmanian-born Cooley, who has been England's fast bowling coach since May, 2003, would return home and take up his new post when his contract with the England and Wales Cricket Board expires next May.
Cooley has been widely praised for his work with England's fast bowlers, including Steve Harmison, Andrew Flintoff, Simon Jones, James Anderson and Matthew Hoggard, who helped their country to their win over Australia in the recent Ashes series.
Along with former Australian wicketkeeper Rod Marsh, Cooley helped establish the fast bowling programme at England's National Cricket Academy.
Cooley was a member of the Mowbray club in Launceston, the same side as Australian Test captain Ricky Ponting, and played 25 matches for Tasmania in the domestic Sheffield Shield competition. He did not play Test cricket.
He said working in England for the last three years had been rewarding but he was now looking forward to returning to Australia.
"It excites me to be able to return Down Under to work with talents ranging from the current players to the significant number of emerging youngsters around Australia," he said in a prepared statement.
Cricket Australia chief executive officer James Sutherland said the fast bowling coaching role was seen as a priority following an analysis of team performance.
"Troy was our first choice, the players from captain down rate him highly, and his work in England speaks for itself," he said.
When he returns to Australia, Cooley will be based in Brisbane as head of the fast bowling training program, working closely with the Australian cricket team and State cricket associations.