Co-hosts Australia rescued their Women's World Cup hopes with a 4-0 thumping of Canada to sweep into the last 16 at the expense of the Olympic champions on Monday.

The Matildas came into the clash needing victory to ensure they made the knockout round after a stunning 3-2 defeat to Nigeria left them on a knife-edge.

They thrived on the pressure in front of more than 27,000 in Melbourne to consign Canada to an early flight home, with Hayley Raso scoring twice.

Australia top Group B ahead of Nigeria, who drew 0-0 with Ireland, and set them up for a clash against the second-placed team in Group D -- likely Denmark or China -- in the next round.

"I'm so, so proud of this team," said coach Tony Gustavsson. "The players, there's something special about this group.

"In the press conference yesterday someone asked if this was legacy-defining, a crossroads moment for this team, and yes it was. But we didn't shy away from it," he added.

"The way the players performed tonight, all the talk about Sam (Kerr), they just went out and played their game, stayed true to who they are."

Talismanic striker Kerr remained on the bench as a precaution despite declaring herself available after a calf injury that had ruled her out of Australia's first two games.

Real Madrid's Raso put them ahead in the ninth minute, firing low into the corner after captain Steph Catley fed a teasing low cross.

They had a goal controversially disallowed 10 minutes before the break, but put it behind them and Raso made sure on their very next attack for her second with a close-range tap-in.

A shellshocked Canada made four changes at half-time, but the comeback never materialised and Mary Fowler bagged Australia's third from a counter-attack before Catley sealed victory with an injury-time penalty.

"Everybody fought for each other, you could see that out there," said Raso. "We showed that never-say-die attitude and we're absolutely delighted."

But it was the end of the road for Canada, who would have been through with a draw.

"Reality is setting in but all credit to Australia, they were the better team," coach Bev Priestman said.

"Football is cruel, it wasn't our night, and that is it."

Kerr was not risked but the home side were boosted by the return of Manchester City's Fowler, who replaced Kerr in their 1-0 win against Ireland but missed the Nigeria game with concussion.

Yet it was livewire Raso who gave them a dream start.

After a cagey opening, Catley was set free down the left and her curling ball found Raso, who took two touches before smashing it into the corner.

It was called offside, but VAR awarded the goal and the stadium erupted.

Australia thought they had their second when Fowler rifled home from close range, but after a long delay, VAR found that Ellie Carpenter was fractionally offside and it was disallowed -- to the disgust of the home fans.

Unperturbed, they launched straight into another attack and this time the goal counted, with Raso making no mistake from two yards out.

Canada made wholesale changes at the break in a bid to revive their fortunes, but Australia resumed where they left off.

Raso and Kyra Cooney-Cross both went close before Fowler bagged the third in the 58th minute after Caitlin Foord beat the offside trap and cut the ball back.

Catley then stroked in a penalty at the death to wrap up the win after a Jessie Fleming foul was punished on review.