At a press conference in Sydney, and with Australia Prime Minister Julia Gillard in attendance, FFA chief executive officer Ben Buckley announced the establishment of the new club.
After the presser, Buckley revealed a decision on the future of Gold Coast United was imminent, and hinted that the forecast was not promising for the embattled club's fans.
"I'm proud to announce, that from next season, western Sydney - the heartland of Australian football - will be represented in the Hyundai A-League," Buckley said.
"Yes, it has taken time to get an A-League club into western Sydney, but now the time is right, and I believe that the model is right.
"The new club will have at its very core a focus on community engagement. The community will have a say in its future colours, its culture, its values, its name and of course the logo and identity of the new club.
"We will also explore, in an exciting first for the A-League... the opportunity for the community to take ownership of the club. We intend to build a model that will be driven by passion of football people in Sydney's west."
The announcement of the new club is sure to place the future of Gold Coast United further in doubt, with the A-League now standing at 11 clubs.
"We intend to make an announcement on the Gold Coast in the next 24 hours," Buckley said.
"... We've said before that we only intend to have a 10 team competition in the A-League next season."The move will bring to four the number of teams in New South Wales, and creates an immediate city derby with foundation club Sydney FC.
Gillard, speaking first at the press conference, also revealed government funding of AU$8 million towards football in western Sydney.
Of that sum, $1 million will go towards the development of women's football and the W-League, while $3 million has been earmarked for the redevelopment of Football NSW's headquarters at Valentine Sports Park, Glenwood.