The Westfield Matildas have bowed out of the 2011 FIFA Women's World Cup to Sweden in a pulsating encounter in Augsburg today.
Two early goals put Sweden in front before a stunning strike from Ellyse Perry put Australia back in the hunt just before halftime.
Australia pushed hard and had several excellent chances to get things levels before a defensive error gifted the Swedes a third goal.
The battle in the second half continued with Australia knowing a goal would put them right back in the mix but a number of infringements made it difficult for Australia to gain momentum as time and time again players were brought down in dangerous attacking positions.
The Westfield Matildas continued to fight to the end but Sweden managed to hold on to put themselves in the semi-final against Japan as Australia exited the tournament at the quarter final stage.
"At half-time at 2-1 we felt really comfortable and well in the game," said Westfield Matildas Head Coach Tom Sermanni.
"I think we were until we made another mistake and you can't make mistakes at this level.
"When you consider the goals we've given up in this tournament I think we've done extremely well to get where we've got to.
"You can't be a winning team and defend well for 90 per cent of the time and give opposition easy goals.
"In saying that I am extremely proud of what this group of players have achieved and what steps we have made in this tournament to really improve our standing in world football.
"Now we've got to refocus and get our minds onto the job of qualifying for the London Olympics which begins in China in September."
The Westfield Matildas head to Jinan in China for a six team round robin qualifying tournament from 1-11 September where the top two teams after each nation's five matches will progress to the 2012 London Olympics.