Australia coach Tony Gustavsson rues what might have been after England loss
Goals from Ella Toone, Lauren Hemp and Alessia Russo cancelled out a stunning strike from talismanic Matildas striker Sam Kerr in front of a raucous sell-out crowd of 75,784 at Stadium Australia in Sydney.
Gustavsson had highlighted the gulf in quality between the two squads before the match, with some of the Matildas in his starting line-up playing for mid-table teams in Sweden as well as in a relatively weak Australian domestic league.
But after the game, he said the tournament co-hosts had created the same amount of chances as England.
"It's one of those nights where they were more clinical than us in the finishing," he told TV network Seven.
"I think our defending was very solid in the first half. We told (the players) at halftime to be more confident on the ball and play the way we can play.
"When we started to do that we dominated the game but unfortunately it didn't pay off with enough goals tonight."
Kerr was making her first start of the tournament after a calf injury ruled her out of the group stage but was kept quiet in the first half by the English back line.
But with Australia down 1-0 the stadium came alive as she collected the ball inside her own half in the 62nd minute, backed up England captain Millie Bright before sending a brilliant strike from 25 yards past the helpless Mary Earps.
Australia had the wind in their sails but England refused to wilt under the pressure and on 71 minutes Player of the Match Hemp put them back in front.
Matildas' right-back Ellie Carpenter, one of the tournament's stand-out players, failed to deal with a harmless-looking ball over the top and Hemp took full advantage with an easy finish.
Russo then delivered the killer blow four minutes from time to cap what had been arguably England's best performance of the competition.
"We can't thank the fans enough, they've been amazing. We've felt the love all over the country," Kerr told Seven.
"Just to see the support has really pushed us on. So hopefully this stays around because this has been amazing for us."
A dejected Matildas squad, some of whom were reduced to tears at full-time, will now have to rally for a third-place playoff match against Sweden on Saturday.
"It's hard to think about (the third place playoff) now but Tony's already said it's a quick turnaround," Kerr said.
"We've got to pick ourselves up and hopefully not go home empty-handed."