Football Federation Australia chairman Steven Lowy said Friday he will not seek re-election later this year, in a shock decision that comes amid a reform battle that could lead to a takeover by FIFA.

The world governing body has been pushing the FFA to expand its membership and adopt a more democratic governance model, or potentially face FIFA taking over the running of the game in Australia.

Lowy, who took over in 2015 after his father Frank Lowy stepped down, said the suggested changes would give domestic A-League clubs more power, handing their foreign owners more control of the game at the expense of grassroots football.

He hoped his resignation would "give the game every possible chance over the next few months to expand the Congress [which elects the board] and at the same time preserve the independence of the FFA board", Lowy told reporters in Sydney.

Describing the period ahead for Australian football as "one of uncertainty and intense debate", Lowy said he wanted to make it clear he did not "wish to serve in a governance structure where independence was compromised".

Earlier this month, the FIFA-endorsed Congress Review Working Group tasked with tackling the governance issues sent its recommendations to the world body.

FIFA could establish a normalisation committee to take over the football federation if the recommendations are not adopted at a FFA special general meeting in early September.

Such a move could jeopardise the Socceroos' defence of their AFC Asian Cup trophy next year.

The working group's proposed reforms include expanding the FFA's Congress, which elects the body's board, from 10 to 29 members.

State and territory associations currently control nine of the 10 seats, with the mooted congress to include the A-League clubs, the footballers' association and a women's council consisting of several members.