Defence Minister Stephen Smith said the changes, approved by Cabinet on Monday night, would give women access to the remaining seven percent of military roles currently restricted to men.
Only three of Australia’s military partners allow women on the frontlines – New Zealand, Canada and Israel, Smith said.
The new policy will be phased in over five years to ensure female combatants had the necessary training and preparation, he added, describing it as a major cultural and operational shift.
“From this day forward... no combat roles, no frontline role will be excluded from an Australian on the basis of his or her sex, it will be open to anyone to apply on the basis of merit,” Smith told reporters.
“This is a significant and major cultural change.”
But opponents of the move condemned it as a “political gimmick and a distraction”.
Women currently account for about 10,000 of the 81,000 full- and part-time positions in Australia’s armed forces, with the newly open roles mainly as frontline infantry and artillery soldiers, naval clearance divers and airfield guards.
Widely supported by military chiefs, Smith said the changes would not prescribe female ratios for frontline positions and it was “entirely a matter for the men and women of the defence force to put their names forward for a particular role”.
“It is a logical extension to the very strongly held view in Australian society that all of us are equal irrespective of our backgrounds and irrespective of our sex,” he added.
New guidelines will be developed outlining the physical and mental requirements for elite jobs and both men and women would have to satisfy them.
Women would be allowed to lead infantry units or work as snipers and commandos and Smith said the reforms would clear the way for a female to one day command the entire military as Chief of Defence – a role until now confined to men.
He denied the changes would in any way diminish defence standards or that it would make Australian forces a greater target in conflict zones such as Afghanistan.
Neil James, head of the Australian Defence Association lobby group, has previously warned that close quarters combat is too dangerous for women and that they were more likely to be killed in frontline environments than men.
He accused Canberra of “jumping the gun” on research currently being carried out by defence officials about women’s abilities in a military context.
“It doesn’t actually give us a lot of confidence that this is anything more than another political gimmick and a distraction,” Mr James told ABC radio.
Defence Personnel Minister Warren Snowdon conceded there was a “variety of opinions” about the shift and there would be strong pockets of resistance but he was confident they could be managed.
The changes come as Australia reviews the treatment of women in its military following a number of sex scandals – the most highly publicised involving the Internet streaming of a female cadet having sex at a top defence academy.