Warne said "it's time to draw a line in the sand with Australian cricket" as was done in the mid-1980s, if the team wants to be No. 1 again.
"Big decisions need to be made from the top down by Cricket Australia, selectors, the coach and the captain. Tough decisions on what is most important for Australian cricket, who is accountable for the selections in the past two years that have left us at this point, do we have the right leadership and who are the experienced players or fresh faces to take us into the future," Warne wrote in his column for the Herald Sun.
Ranked fourth behind India, South Africa and England, Australia lost the Ashes at home for the first time since 1987, and are currently on the verge of suffering another humiliating defeat in the ongoing Sydney Test.
"There is no disgrace in being beaten by a better team, but we must learn from them. We are no longer number one. The sooner we realise that and act on it, the quicker we can progress from fourth in the ICC rankings. There is no quick fix. It is going to take time, patience, support and encouragement," the yesteryear great wrote.
Warne's recommendations included getting international players to play more domestic cricket so as to strengthen their base, no more resting of players, do away with the seven-match ODI series against the same team, players getting to know their team-mates better, having fewer support staff, getting bowlers to start thinking about wickets, getting batsmen to work against bowlers and not bowling machines.
Warne also added that there needs to be an environment that is competitive and team orientated.
"I am passionate about Australian sport, in particular cricket as I love the game, and I want to see Australia back at No. 1. I was lucky to be given an opportunity to play for Australia in an era that was very successful. I learnt a lot about the game and it was very enjoyable.
"I am not sure how much fun the current team is having. Is their attitude and thinking that we are all in this together - let's help and support each other no matter what - or are they just thinking about their own positions? Australia have been the benchmark for a long time in all facets in the Test arena and that's something to be proud of."