Ms. Bishop said she was informed he would not be taking the job by John Sullivan, the Trump administration's acting secretary of state.
Harris had already been approved by the Australian government, but the White House late on Monday asked the Senate Foreign Relations Committee to postpone Harris' confirmation hearing, which was supposed to take place on Tuesday morning.
During his own confirmation hearing to become secretary of state, the former Central Intelligence Agency director Mike Pompeo had promised to fill the role of USA ambassador to South Korea quickly.
Admiral Harry Harris, who is now commander of US Pacific Command, had been nominated for the Australia role in February, and was due to have his confirmation hearing yesterday.
The impetus for the change appears to be the need to fill a critical diplomatic role, especially ahead of potential talks between Trump and North Korean leader Kim Jong Un.
A US State Department official said the country's relationship with Australia was "steadfast" and communications were "as good as ever". "His nomination had strong bipartisan support and he would have been an effective advocate at a time when the USA alliance is a topic of increasing debate because of China's rise and its economic importance to Australia", Shearer said.
Mnuchin to visit China to discuss trade issues
The Chinese government in turn proposed its own tariffs on US goods, targeting agriculture and other exports from rural and Midwest areas important to Trump's election.
U.S. forces in the Pacific "must be prepared to fight tonight, so I take him at his word", he said previous year about Kim's intentions.
"Australia really is, if you like, a collateral casualty here to the shambolic personnel practices of the Trump administration", he told the ABC.
Harris has also watched as an increasingly assertive China has pursued a more muscular military posture in the Pacific and established a military presence on man-made islands in areas the USA and its allies contend are worldwide waters.
He said he was encouraged by the prospect of a summit, but that North Korea remained the biggest security threat in the Asia-Pacific region.
"While we would have welcomed Admiral Harris here as ambassador to Australia, we understand that there are significant challenges for the United States on the Korean Peninsula", she said.
The White House said in February it was no longer considering Victor Cha, a former official who questioned the wisdom of a preventative military strike on North Korea that was being mulled by the administration as a possibility earlier this year.
Still, Harris's nomination to serve as the top ambassador to South Korea will likely take some time.