His axing came after a 10-month investigation into allegations he helped his partner get a job at Sydney Airport.
After refusing to resign over the findings, Quaedvlieg said he maintained his strong denials.
"I will now take some time to fully consider my options," the former ACT chief police officer said in a statement.
Quaedvlieg pocketed about A$500,000 ($535,000) while on leave during the investigation, remaining on his full pay.
Government frontbencher Michael Sukkar defended the length and cost of the investigation, saying the decision to sack Quaedvlieg was not taken lightly. "Yes I would have liked the investigation to be 10 times faster and have cost 10 times less — of course," Sukkar told ABC radio.
"But in the end due process and undertaking of a thorough investigation to get to the bottom of allegations and actually proving them is very, very important."
Quaedvlieg was also found to have made a "false statement" to now-Home Affairs Minister Peter Dutton about his personal relationships, and failed to disclose a significant change in his personal life.
Dutton said his conduct went beyond an isolated error of judgment and ultimately undermined his capacity to continue in the role.
"He engaged in acts, and made omissions, which materially advantaged that candidate over other comparable candidates for ABF employment," Dutton's statement said.