After an 18-year campaign, the 10 per cent tax on tampons and pads will be removed after states and territories agreed to make sanitary products exempt from the GST.

Key points: Public push to make sanitary products exempt started when GST was introduced in 2000

Public push to make sanitary products exempt started when GST was introduced in 2000 States and territories have agreed to the Federal Government's proposal to remove the tax, which will cost them about $30 million a year in GST revenue

States and territories have agreed to the Federal Government's proposal to remove the tax, which will cost them about $30 million a year in GST revenue Tampons, pads, menstrual cups, maternity pads and leak-proof underwear expected to be included in exemption list

Treasurers met this morning to discuss the matter and have unanimously agreed to pass the Federal Government's proposal, which will see the tax removed by January 1, 2019.

The GST on sanitary items has long been described as unfair because other health products including condoms and Viagra are exempt.

But both major parties recently changed their policies to also exempt menstrual products.

The items to be made exempt are expected to include tampons, pads, menstrual cups, maternity pads and leak-proof underwear, but the full list will be subject to public consultation.

The move will cost the states $30 million a year but the Coalition argues the shortfall will be easily covered because they are already receiving more GST revenue than forecast.

After agreeing to the GST exemption for sanitary products, state and territory treasurers finished today's meeting by asking for a guarantee in legislation that none of them will be short-changed under the proposed overhaul of the GST carve-up.

Federal Treasurer Josh Frydenberg said it would take a few months for the Federal Government to consult with states and territories as well as the public about which products would come under the definition of "feminine hygiene" for the purposes of the GST change.

Campaigners welcome move to scrap 'sexist' tax

The GST on tampons and pads has been a hot political issue since the consumption tax was introduced in 2000.

At that time, a group calling itself the "menstrual avengers" dressed up in costumes to argue against the tax.

Sorry, this video has expired "Menstrual Avengers" pelt government ministers with tampons in February 2000. ( Jim Middleton )

One of those groups that joined the campaign to axe the tampon tax was Share the Dignity, a charity providing sanitary items for women experiencing homelessness and poverty that managed to gather more than 100,000 signatures on its petition earlier this year.

Founder Rochelle Courtenay said today's decision — and the entire debate around GST on sanitary products — was about more than just money.

"I don't think its even about the money. It's about equality," she said.

"Why are condoms, lubricants and nicotine patches all untaxed, yet female items that we don't have a choice in are taxed?

"It's a sexist tax. Today is really about equality."

Along with the public campaign to remove the GST from menstrual products, many have been pushing to make breastfeeding aids exempt from the goods and services tax.

But these products were not included in the Federal Government's proposal, meaning the GST will remain on breastfeeding aids like pumps and nipple shields.

Incontinence aids including pads and adult nappies required for continence issues are already exempt from the GST.

Minister for Women Kelly O'Dwyer said she was "delighted" the state and territory treasurers had agreed on "the right outcome".

"Well it's had a fairly tortured history … [then-treasurer] Joe Hockey, as the first Commonwealth minister to actually raise this issue, put it on the agenda for COAG and didn't get a lot of support from the states and territories at that time … but we said we wanted to have another crack at it," she told Sky News.

"We're really delighted that everyone's come on board to scrap what is an unfair tax.

"Millions of women right across the nation will be very thankful for it."

Sorry, this video has expired Kelly O'Dwyer welcomes tampon tax abolition

'Common sense' reform was 'well overdue'

Mr Frydenberg said today's agreement was "good news for women across Australia" and noted that many had been campaigning for the change for years.

"Common sense has prevailed and this reform, led by the Federal Government, is long overdue," he said.

Prime Minister Scott Morrison said he was also pleased the states and territories had agreed on the change.

"I think it's a bit of common sense. It had always been our view that we wanted to see it changed," he told Perth radio station 6PR.

Earlier this year Mr Morrison, then treasurer, vowed to remove the tax and described it as an "anomaly" that should never have been applied to sanitary products in the first place.

"I can see it is a source of frustration and angst. Here's a straightforward practical opportunity to deal with it once and for all," he said at the time.