Australia will let women fight on the front line for the first time, making them one of five countries to remove gender restrictions to their armed forces.
Now women will be allowed to perform any role in the army, as long as they meet the physical and psychological requirements.
The changes will be brought in over the next five years and means that women could serve in infantry combat units and special forces.
Australian Defence Minister, Stephen Smith, called the move a “significant and major cultural change.”
He added: "Once this is fully implemented, there will be no restrictions. If a woman is fully capable of doing the entrance programme for the Special Air Service or Commandos, [they can join]."
The decision also has the backing of defence force chiefs.
However, the Australian Defence Association (ADA), an influential think tank said the government was “jumping the gun” because research was still being carried out to determine women’s capabilities in the military.
The ADA argued that allowing women onto the front line would result in a higher number of female casualties.
Canada, New Zealand, Denmark and Israel already allow women to take up combat roles as long as they pass the necessary tests.
Women in Britain and the US are excluded from dedicated infantry roles.
The lifting of Australia’s ban on women serving as front-line infantry, artillery soldiers, navy clearance divers, mine-disposal experts and airfield guards, comes as the country reviews how women are treated in the army following several sex scandals.
A recent incident saw a female cadet having sex with another recruit broadcast on Skype from the Defence Force Academy in Canberra.
Former naval officer Kathryn Spurling told ABC radio she believed the move to allow more women on the front line would increase female enlistment.
She added: "I think you probably won't find too many women who can meet those very stringent physical requirements.
"But I think … it just has to be done, and I think Australia's very brave to do this."