Defence Minister Richard Marles on Friday confirmed the MRH-90 Taipan helicopters would not return to flying as part of Australian Defence Force operations.
The fleet was scheduled to be withdrawn from service in December 2024.
The early phasing out of the Taipans follows a crash off the Queensland coast in July that killed four people on board during military drills.
Mr Marles said the decision did not indicate the outcome of investigations into the crash.
"The MRH-90 has been an important capability for our country and defence force and I recognise the hard work of the hundreds of people who dedicated themselves to acquiring, operating and sustaining the aircraft," he said in a statement.
"The government's highest priority is the safety and wellbeing of our people. We continue to support the families of the four soldiers who lost their lives earlier this year and the broader defence community."
Mr Marles told Nine's Today program the decision to ground the Taipans was the "only decision that makes sense" given they would not have been flown until investigations into the fatal crash have wrapped up.
That is expected to take a year to complete.
"There is no world in which we should be flying these helicopters again. Given that, what we really need to do is to be moving as quickly as we can to our new capability, the Black Hawks, as soon as possible," Mr Marles said.
The federal government has been looking at speeding up the rollout of Black Hawk helicopters following the Taipan crash, with the first of the 40 aircraft already having arrived in the country.
Opposition defence spokesman Andrew Hastie said he backed the decision to end the service of the choppers early.
"Grounding the Taipan after the tragic loss of life in the Talisman Sabre crash was the right thing to do, and today's decision to end service ahead of next year is welcome given the long held concerns with Taipan's performance," he said.
Liberal MP Phillip Thompson, an army veteran, said the grounding of the Taipans was overdue.
"The inquiry into the tragic helicopter crash, which saw four of our Australian Army soldiers killed is ongoing. Their families, their mates and the wider ADF community want answers and the government needs to be honest and transparent," he said.
"I look forward to the chronically underperforming and dangerous MRH-90 being fully replaced by the proven and reliable Black Hawk."
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