Advocaat, 60, was expected to confirm he would take the Socceroos top job after leading Zenit to their first Russian title in 23 years last weekend.
However, the former Rangers boss informed the Football Federation of Australia (FFA) this week that he did not intend to honour the deal.
And Baan, who oversaw Saturday's victory against a depleted Nigeria, said: "We are disappointed with the decision.
"If you sign a contract and suddenly you don't accept the consequences, it's very difficult.
"It is because we were so sure that he was coming in January because we signed him a few months ago.
"I've spoken to him many times, and also in preparation for this game, but when they won the championship something has happened.
"I couldn't reach him and the first thing I was thinking that he was having a big party but maybe the pressure was that high that he did not come."
He added: "So now we have to look for another replacement and in the middle of competitions it is difficult to find another quality coach."