The 53-year-old Deans, who had been Australia's first foreign coach, led the team for 74 Tests in his five-and-a-half years in charge, a record for a Wallabies coach.
McKenzie, a popular local choice who guided the Queensland Reds to a maiden Super Rugby title in 2011, will take the reins six weeks before they play the opening match of the Rugby Championship against bitter rivals New Zealand.
The former Wallabies prop had put his hand up for the role earlier in the year and had beaten out a strong candidate in World Cup-winning coach Jake White, now at the ACT Brumbies.
"I'm looking forward to saddling up with the Wallabies," McKenzie said at a media conference in Sydney. "There's a thousand things I need to work on.
"I'll be picking a team that I think can beat the All Blacks and I'm really looking forward to that task.
"It's a matter of getting the headspace right and getting the tactics right and having a crack."
The news conference came hours after the ARU issued a news release saying Deans had stepped down.
While the release cast the move as voluntary, ARU boss Bill Pulver confirmed the governing body had been conducting a coaching review for months.
McKenzie would have replaced Deans even if the Wallabies had beaten the British and Irish Lions in their three-Test series, Pulver confirmed.
In the event, the 2-1 series loss, capped by a thumping 41-16 defeat in the Sydney decider on Saturday, offered the perfect excuse for the ARU to strike.
"I wish to take this opportunity to thank everyone involved in Australian rugby for their support through the duration of my tenure," Deans, who was contracted to the end of the year, said.
"It has been a rewarding five years and I am proud of all that we have achieved.
"Most especially I would like to thank the players for their efforts and wish them all the best going forward."
Softly-spoken and unfailingly cagey, Deans never endeared himself to a sceptical Australian public weary of New Zealand's dominance over the Wallabies throughout the past decade.
Although handed a contract extension prior to the 2011 World Cup, Deans faced almost immediate calls for his head when Australia exited in the semi-finals, a performance many Down Under regarded as an under achievement.
After a shock loss to Scotland on home soil last year, Deans held on to his job by guiding the Wallabies to a 3-0 whitewash of Wales.
Injuries put paid to the team's hopes of winning the inaugural four-nation Rugby Championship, but Australia finished the season with a successful tour of Europe, marred only by a heavy loss to France.
Deans's tenure was marred by disciplinary problems and a number of off-field distractions during the Lions series would have steeled the ARU's resolve to act.
Young playmakers James O'Connor and Kurtley Beale, forgiven for a host of transgressions under Deans's watch, embarrassed the team by being photographed at a fast food outlet at 4am days before the second Test in Melbourne.
The pair escaped punishment at the selection table, leaving Deans appearing soft on discipline and all-too-willing to coddle favourites.
Local media also reported later that the pair had missed a team bus to training before the third and final Test and were seen partying in a Sydney nightclub after the loss.
Deans's failure to pull the talented but brash playmaking duo in line has fuelled local media reports of a rift between the senior players and the coach.
McKenzie said he would not be allowing his players to rest on reputation alone.
"I am an ex-Wallaby so I have a very strong opinion," he said. "I understand the sacrifices it takes to be successful at that level.
"For me that's a week-to-week contract ... I don't want it to be an opportunity that players get easily."
- Sports & Recreation