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Australia's bid to co-host the 2023 FIFA Women's World Cup has been given a boost after Brazil announced its withdrawal from the bidding process.

Australia and New Zealand are now in a three-horse race to host the 2023 FIFA Women's World Cup after Brazil withdrew their bid.

The South American giant announced on Tuesday its withdrawal after it was deemed economic support from government and private entities could not be guaranteed.

In a statement, the Brazilian Football Confederation (CBF) said economic concerns related to the COVID-19 crisis were a primary factor in the bid being withdrawn.

"In view of the exceptional times experienced by the country and the world, CBF understands the cautious position of the Brazilian government, and of other public and private partners, which prevented them from formalising the commitments within the time or in the required manner," the CBF said.

Brazil's withdrawal means Australia and New Zealand are bidding to host the tournament along with Asian heavyweights Japan and another South American nation Colombia.

Football Federation Australia chief executive James Johnson said while Brazil's withdrawal was significant, it was important to recognise Colombia becoming South America's sole representative could also play a role in determining the winning bid.

"It must have been a difficult decision by CBF to withdraw," Johnson told AAP on Tuesday.

"If you look at some of the teams they've fielded over the years, they're a powerhouse in football, they've hosted many great tournaments.

"So it would have been a difficult decision for them to make and we certainly congratulate them on their efforts to advance the women's game. Unfortunately for them, this didn't go their way.

"More specifically, four (bids) becomes three - this is correct.

"The one tactical point is that South America now, CONMEBOL (as) a confederation, they only have one bid and I think that is a significant change in addition to the fact that there are now three and not four bids."

The winning bid will be decided by an online meeting of the FIFA council on June 25.

Japan, the 2011 Women's World Cup winners, are the main rivals to Australia and New Zealand's bid.

The Asian nation's bid features eight stadiums, many of which are set to host matches for next year's Olympic football tournaments.

Outsiders Colombia, who only formed a women's league in 2017, are bidding to become the first South American nation to host the Women's World Cup.