Western Force and Melbourne Rebels are the Australian clubs facing the axe from Super Rugby.
The Australian Rugby Union (ARU) confirmed one of Force or Rebels would be dumped when the competition reverts to a 15-team, three-conference format in 2018.
Brumbies, two-time winners, were also considered for cutting before being eliminated from the process.
"At the request of the board, ARU management completed an exhaustive analysis on three of our teams – the Brumbies, Western Force and Melbourne Rebels," ARU chairman Cameron Clyne said in a statement on Monday.
"The purpose of the analysis was to assess each of those teams on their financial sustainability, high performance and commercial factors, examining a range of metrics, with a view to identifying which of those three teams to remove from the competition.
"After reviewing management’s findings, the board made the decision to eliminate the Brumbies from the process and identified that consultation is required with both the Western Force and Melbourne Rebels to further understand their financial position.
"We don’t anticipate this final consultation period being a drawn-out process and expect to be able to deliver an outcome in the very near future."
MEDIA RELEASE | ARU TO CONSULT FORCE AND REBELS AS SUPER RUGBY MOVES TO 15 TEAMS IN 2018: https://t.co/esOS81vbYY
— ARU HQ (@ARUhq) April 9, 2017
Clyne stressed that the decision to remove an Australian team was made by the ARU, not SANZAAR.
He also said the ARU backed the decision to move back to 15 teams, with two South African sides also set to be axed.
"Since the ARU expanded to five Super Rugby teams in 2010, the economy we operate in globally has changed dramatically," Clyne said.
"With the incentives on offer in Europe, the player exodus has been significant in Australia and indeed across our SANZAAR partners. Based on recent performance trends, it is evident that we do not currently have the playing depth in Australia to service five teams in Super Rugby.
"Performance declines by our teams since the expansion of Super Rugby has had a direct correlation with declines in revenue across their businesses."