Michael Cheika said Quade Cooper has not done enough to merit a place in the Australia squad after dropping the fly-half on Wednesday.
The playmaker has failed to hit the heights in Super Rugby since rejoining Reds following a spell in France with Toulon.
Cooper was not among the 38 players selected by the Wallabies for intensive training camps ahead of the Bledisloe Cup opener against New Zealand next month.
Wallabies head coach Cheika said he could not justify including the 29-year-old due to his lack of form at club level.
Cheika said: "From a form perspective, I don't think his form has been brilliant, to be honest,
"With us, it's a bit different because I haven't been giving him big minutes [at international level], so I can't be saying it's form in that way.
"And, if we're honest, there's a reason why we haven't been giving him those minutes. I have had a long talk with him yesterday and I don't want to breach that code of coach-player by giving out too much detail, but one of the big things is for him to look like he is enjoying his footy.
"We have had a talk about the reasons why and obviously a lot of that is trying to get him back into a space where he can be that player that's going to get us around the park and do the stuff that we want him to do.
"I don't feel like that's been happening and I feel like at a certain point I have to change things.
"With a bit of congestion now in the midfield players, with [Kurtley] Beale back and some of the options around the ten position, I decided that's the way to go."
Scott Higginbotham was also left out as Cheika included 11 uncapped players, including the likes of Sef Fa'agase, Adam Korczyk and Izack Rodda.