Australia has welcomed as "very touching" the scrapping of a planned French wind farm on the site of a World War I battlefield where thousands of the country's soldiers died alongside their British comrades.

French company Engie Green had planned to erect two turbines on the grounds of the former Bullecourt killing fields in northern France, where some 10,000 Australians were killed or wounded in 1917.

It marks one of the most significant sites in Australian military history.

Nearly 9,000 British troops were also killed, injured or captured. Of the tens of thousands of British, Australian and German soldiers who died there, it is believed the remains of 3,000 to 4,000 were never recovered.

The planned site for the wind farm is a natural burial ground near the Bullecourt memorial that is visited regularly by Australian families.

"This is wonderful news for every Australian and especially those with a family connection to the Battle of Bullecourt," veterans' affairs minister Dan Tehan said in a statement.