Ledesma has made the shock announcement he will step down as Wallabies scrum coach after the final Bledisloe Cup match in two weeks time to be in charge of the Jaguares in Super Rugby in 2018.

Ledesma told Wallabies players and staff after Australia's 37-20 win over Argentina in Mendoza in what Cheika said was an extremely tough decision for the 44-year-old.

"I was pretty devastated when he told me but I understood what the story was," Cheika said. "I want him to succeed.

"It took on a serious nature maybe a couple of weeks ago and we discussed it very openly and honestly, that's Mario's style. He is stepping up now to be a head coach and I think the time is right. It wouldn't be happening if he was going to France or England. That guy has committed every inch of himself to the Wallabies."

The former Argentinian hooker was poached by Cheika to the Waratahs and had signed a deal to be in Australian rugby until the 2019 World Cup.

Being away from family and a desire to one day become national coach of Argentina were two reasons that resulted in Ledesma making the decision to call time on Australian rugby.

"Argentina gave us a gift when they gave us Mario Ledesma," Cheika said. "In 2014 when we went on the [spring] tour, when I first took over, we got our scrum pummelled by the English in one game and if you're a good person when you get a gift, you should always give one back.

"Now we're giving a gift back because Mario Ledesma is a good man, he's a great coach. I'm sad that he's leaving, personally as his friend and from a rugby point of view.

"Not only is he improving himself by having this position, which is what we want our people to do, but also he's coming back to his family who he hasn't seen for many, many years. It's going to be a great thing for Argentinian rugby and hopefully the Jaguares will do very well except when they play against the Australian teams."

Ledesma will stay in Argentina for a few days to organise a transition period with the Jaguares. The club is expected to make an official announcement on Tuesday.

Cheika said he has already spoken to a number of potential Australian candidates for the role and has one in particular on his radar.

A replacement for Ledesma won't come on in a full-time capacity until after the spring tour.

Cheika will take an interim coach with the team on the spring tour of Japan and Europe before a person will be officially appointed with an eye to the World Cup.

Ledesma's last outing with the Wallabies will be for their final match on home soil against the All Blacks in Brisbane on October 21.

"Over the next week we'll try and finalise who will come on the tour," Cheika said. "I'll probably take a more active role in the forwards.

"Whoever we get has to connect into what we've been doing. There's been no change of direction whatsoever. We won't be changing anything."

Asked whether he was worried about the Aussies' secrets being shared by Ledesma, Cheika said: "This whole thing about IP is all rubbish. Mario is not going to there and say: 'they use these lineout calls'. That's not him as a person."

Wallabies halfback Will Genia said he got emotional when Ledesma addressed the team in the after of a 17-point win against his home nation.

"I got a bit teary when he got up and spoke because he's such a passionate guy," Genia said. "He's done an amazing job in the last couple of years since the World Cup and we'll miss him.

"I'm so happy for him that he's been given the opportunity to get back home and spend time with his family."