Chairman of selectors Trevor Hohns ended weeks of speculation when he told Sydney's Sunday Telegraph the board had spoken to Waugh about his future.
Hohns said Waugh had the board's support for the final two Ashes Tests against England in Melbourne and Sydney but there were no guarantees beyond that. "We have had initial discussions," Hohns was quoted as saying.
"At the moment Stephen has our support until the Sydney Test (starting on January 2). The decision is then up to him whether he wants to continue or not."
Despite being one of cricket's greatest ever players, Waugh was dropped from the Australian one-day side in February. His twin brother Mark was left out of the Test team in November, prompting him to announce his retirement from the international arena.
Steve has made it clear he wants to continue captaining Australia beyond the Ashes series but there is increasing speculation he may retire after Sydney rather than face the ignominy of being dropped.
Waugh is Australia's most successful Test captain with 32 wins from 43 matches in charge and will equal Allan Border's world record 156 Test appearances when he plays in Sydney.
But the 37-year-old has been struggling to reproduce his best form with the bat in the last 12 months and the selectors say that if he wants to continue beyond Sydney he will be judged on his current form.
"He will be judged on form like any other player," Hohns said. "He has our support for the time being.
"There has been no push. The decision is entirely Stephen's at this stage."