Prime Minister Malcolm Turnbull congratulated Iraq and the Iraqi Security Forces after its Prime Minister Haider al-Abadi announced that all areas of Iraq have been liberated from ISIS control.
"We congratulate the Iraqi Security Forces for their courage and determination in defeating this national, regional and international threat," Mr Turnbull said.
"The liberation of Iraqi cities and towns from ISIS control has saved countless lives and ended a pattern of terror, anguish and murder.
"Their bravery in the face of unimaginable brutality has made the region and the world a safer place by robbing terrorists of their narrative of invincibility. The government of Iraq is to be congratulated on forcing, in recent weeks, such a rapid collapse of ISIS forces."
In a joint statement with Defence Minister Marise Payne, the PM said the fight against ISIS is not over and Australia will discuss its ongoing contribution to counter the threat.
"Australia has made a significant contribution to the international counter-ISIS Coalition through supporting the Iraqi Security Forces' campaign, providing direct air support, advice and assistance to the Iraqi Counter Terrorism Service, and training Iraqi Army and law enforcement units," the statement said.
"Australia has also committed $180 million in humanitarian assistance to Iraq since 2011.
"We recognise the contribution our Australian troops have made. We thank them for the vital role they played in supporting the Iraqi Security Forces to liberate Iraq.
"While today’s announcement by the Iraqi government is an historic moment, Iraq’s liberation does not mean the fight against terrorism and ISIS in Iraq is over.
"To assist the Iraqi government to deliver long-term security, Australia will discuss our continuing contribution to the counter-ISIS coalition with the government of Iraq and our international partners."
It is understood the Australian Defence Force's sixth rotation, made up around 300 Australian and 100 New Zealand troops, will remain in Iraq until the middle of 2018.