Following the FFA's failure to meet a FIFA-imposed deadline to pass key reforms to the composition of its Congress, it was widely expected that world football's governing body would step in to run the organisation.

But FIFA has decided to allow further negotiations in an attempt to resolve the impasse over the formation of its ruling Congress, which currently has 10 members.

The FFA wanted to expand the Congress to 15 members but their plan failed to receive the required majority during an Extraordinary General Meeting last week.

The Congress review working group will include all key Australian stakeholders and "direct support" from FIFA and the Asian Football Confederation (AFC).

A delegation from FIFA and the AFC are due to travel to Australia in the New Year, where terms of reference for the group, including objectives, composition, mandate and timeline, will be agreed.

FIFA's decision to allow for the establishment of the working group, taken at a meeting of the Member Associations Committee in Zurich earlier this week, comes after FFA chairman Steven Lowy refused to rule out legal action against the global governing body.

Lowy had warned he may go down the legal route to avoid the establishment of a Normalisation Committee, which would have been considered as an embarrassment for the sport in the country.

The move from FIFA will be seen as a victory for Lowy, who welcomed the decision from FIFA to support and participate in the working group.

"FIFA’s ruling gives all of us a chance to take a fresh look at how the Congress can best represent the Australian football community, with the direct involvement of FIFA and AFC officials in that process," he said in a statement.

"In a wider sense, this process will enable all Australian stakeholders to work together on a shared vision for our game at every level."

Seven of the 10 members voted in favour of the FFA's expansion plans but, as expected, the A-League clubs and the New South Wales and Victoria State Federations went against.

The clubs, who say they generate 80 per cent of cash for football in Australia, wanted at least five seats but the FFA offered them only four, along with one each for the players’ union and two women’s football representatives to cover the professional and amateur games on an expanded 15-member Congress.

The crisis in football in Australia has been compounded by the resignation of national coach Ange Postecoglou last week, despite their qualification for next summer's World Cup in Russia.

The country is also bidding for the 2023 Women's World Cup.