The federal government has agreed to sell 64 sites across the country, raking in an expected total of just under $2 billion and saving taxpayers $100 million a year in maintenance costs for the ageing facilities.
The sell-off follows an audit of Australia's defence estate - a sprawling network of hundreds of properties across the nation totalling around 3.8 million hectares.
The independent review found a number of the sites are sitting vacant or are unfit for use because of rusted and derelict buildings, black mould and chemical contamination.
The list of sites to be sold off includes Sydney's Victoria Barracks - a complex established in 1840 and located on a prime eastern suburbs site not far from the city centre.
Between 450 and 650 people are based at the barracks and will be relocated to other defence sites.
Melbourne's Victoria Barracks, another heritage-listed site whose oldest buildings date back to 1850, will also be sold.
The site played a crucial role in both world wars.
In total, the defence estate review has recommended the sale of 68 properties, of which three have already been offloaded.
The government has decided to sell only part of another three sites.
One site, a dive-training site at Pittwater on Sydney's northern beaches, was recommended for sale but will be retained because it hosts a "critical capability" which can't be easily relocated.
All sites earmarked for sale will be handed over to the Finance Department, which will take responsibility for finding a buyer.
But government officials believe some properties will likely take years to sell off.
Buyers are likely to be a mix of state and territory governments along with private owners.
The proceeds of the sale, estimated to reach around $1.8 billion, will be reinvested into the ADF.
Defence Minister Richard Marles said it would be a "significant and challenging reform" but would leave Australia better off in the long run.
"In order for the Australian Defence Force to protect our nation and keep Australians safe, it must have a defence estate that meets its operational and capability needs," he said.
"For many years this has not been the case, with many defence sites vacant, decaying, under-utilised and costing millions of dollars to retain," he said in a statement.
