President Emmanuel Macron recalled the envoys after Canberra ditched a deal to buy French submarines in favour of US vessels, Foreign Minister Jean-Yves Le Drian said, AFP reported.
Le Drian said that the decision was made to "immediately" recall the two French ambassadors due to "the exceptional seriousness of the announcements made on September 15 by Australia and the United States".
The abandonment of the ocean-class submarine project that Australia and France had been working on since 2016 constituted "unacceptable behaviour among allies and partners," the minister said.
"Their consequences affect the very concept we have of our alliances, our partnerships, and the importance of the Indo-Pacific for Europe," he added.
US President Joe Biden announced the new Australia-US-Britain defence alliance on Wednesday, extending US nuclear submarine technology to Australia as well as cyber defence, applied artificial intelligence and undersea capabilities.
The pact is widely seen as aimed at countering the rise of China.
The move infuriated France, which lost a contract to supply conventional submarines to Australia that was worth $36.5 billion when signed in 2016.
State Department spokesperson Ned Price said in a tweet that Washington understood France's position and was in "close contact" with Paris.
He added that the issue would be discussed "at the senior level", including at the United Nations General Assembly next week, which both Le Drian and US Secretary of State Antony Blinken will attend.
The French ambassador recalls from the United States and Australia – key allies of France – are unprecedented. Withdrawing envoys is a last resort diplomatic step taken when relations between feuding countries are plunged into crisis but highly unusual between allies.
France had made no effort to disguise its fury even before the recalls and on Thursday Le Drian accused Australia of back-stabbing and Washington of Donald Trump-era behaviour over the submarines deal.
The row has for now at least put on hold hopes of a post-Trump renaissance in Paris-Washington relations under Biden.
France's European Affairs Minister Clement Beaune also said Friday that Paris was unable to trust Canberra in ongoing European Union trade deal talks following the decision.
Australian Foreign Minister Marise Payne, in Washington, said she understood the "disappointment" in Paris and hoped to work with France to ensure it understands "the value we place on the bilateral relationship and the work that we want to continue to do together".
Australia earlier shrugged off Chinese anger over its decision to acquire the US nuclear-powered submarines, while vowing to defend the rule of law in airspace and waters where Beijing has staked hotly contested claims.
Beijing described the new alliance as an "extremely irresponsible" threat to regional stability, questioning Australia's commitment to nuclear non-proliferation and warning the Western allies that they risked "shooting themselves in the foot".