Scott Volkers, who is head swim coach at Brazil's Minas Clube, was charged with nine counts of indecent dealing with three girls under 16 in the 1980s, reports Xinhua.
The charges were dropped by public prosecutors in the Australian state of Queensland in 2002 and Volkers has repeatedly proclaimed his innocence.
But a Royal Commission report published last year found that there were "a number of inadequacies in the processes" of prosecutors investigating the case.
According to BBC Brasil, Australian Olympic Committee president John Coates wrote to his Brazilian counterpart and Rio 2016 chief Carlos Arthur Nuzman asking that Volkers not be involved with Brazil's Olympic swimming team in August.
The request was accepted by the Brazilian Olympic Committee, BBC Brasil said.
Volkers had been eligible to join Brazil's coaching staff in Rio due to the number of Minas Clube competitors that qualified for the Games.
Minas Clube press spokesman Rodrigo Fuscaldi said the club was not concerned by the decision.
"We are satisfied with the presence of eight of our athletes in the Brazilian Olympic team," Fuscaldi said.
"The choice of coaches is up to the Brazilian swimming confederation and hasn't even been announced yet. In regards to Scott, we can only say that his conduct has been exemplary."