Defence Minister Stephen Smith has announced the withdrawal of most of Australia's troops from Afghanistan by year's end, saying Australia has been in the war-torn country "far too long".

The majority of Australia's troops in Afghanistan are set to come home by the end of the year as the multi-national base at Tarin Kot, used by Australian forces, is shut down.

The decision to close Tarin Kot, which is Australia's main base in Uruzgan province, has been confirmed by the International Security Assistance Force (ISAF).

Easy to enter, hard to leave After more than a decade of military engagement, Australia is beginning the draw down of troops from Afghanistan. But like all ISAF contributors, Australia is aware that the future security of Afghanistan is far from secured. While pockets of the country are certainly far more secure than they have been, there is real concern about the Taliban quickly filling the security vacuum left once troops withdraw. Read national defence correspondent Michael Brissenden's analysis.

The move will effectively end a 12-year military operation by Australian forces in the war-torn country.

"We've been there for over a decade, and that's far too long," Mr Smith told reporters in Canberra today.

"The effect of that closure will be that Australia will no longer have a permanent presence in Uruzgan province and the majority of Australian Defence Force personnel will return from Afghanistan to Australia.

"Whilst there will be some movement in the numbers and while we are redeploying and repatriating both personnel and equipment, the numbers will go up and down, we expect that by the end of the year we will see at least 1,000 Australian personnel return home."

He said there were currently 1,650 Australian personnel in Afghanistan, including more than 150 people who are working on the withdrawal. About 1,300 ADF personnel are based in Uruzgan and the rest are in the major centres of Kandahar and Kabul.

Mr Smith said the ISAF decision was in line with plans laid out by the international community in 2010 to hand over security of the region to Afghan authorities by the end of 2014.

Uruzgan will be one of the first areas to make the transfer.

"This is the most significant decision and announcement that has been made so far as our withdrawal from Afghanistan is concerned, so far as our redeployment is concerned, and so far as success in transition is concerned," he said.

"If we were not confident that transition would occur in Uruzgan by the end of this year, then this decision would not have been made.

"It is a necessary and logical and natural consequence of transition being effected in Uruzgan by the end of this year.

"The security in Uruzgan is in a much better state than when we first arrived," Mr Smith added.

"The capacity of the Afghan National Security Forces, in particular the Afghan National Army, the infantry kandaks of the Fourth Brigade are in a much better state, and the circumstances and conditions on the ground for the people of Uruzgan are much better."

Tarin Kot is the main Australian base in Afghanistan and is used by both reconstruction, mentoring and special forces troops.

Thirty-nine Australian soldiers have died in the conflict in Afghanistan.

Still dangerous, still risky

Sorry, this video has expired Watch Stephen Smith's announcement

Chief of the Defence Force David Hurley, who made the announcement with the Minister today, agreed the security situation in Uruzgan had improved but said that corruption and "tribal interplays" would remain a part of life in the country.

"These issues are rife in the sense that they will occur across the country but they will be different in different locations depending on how we've moved," he said.

Australia's war in Afghanistan: Australia's presence in Afghanistan dates back to 2001 when three special forces squadrons were deployed.

Mr Smith said international forces would not leave Afghanistan a "perfect society".

"Will Afghanistan continue to be difficult? Yes. Will it continue to be variable in terms of security? Yes. Will it continue from now on to be dangerous for Australian personnel? Yes, it will. The risk is different but nonetheless there is still a risk," he said.

"But in the end, on January 1, 2015, we remain confident that, with the continuing support of the international community, the Afghan institutions of state, including the army and the police will be able to maintain security and allow a newly elected Afghan president and government to start do the things that they want to do for their people."

General Hurley quoted Afghan and ISAF figures from last year that showed that 2.5 per cent of the population in Afghanistan experienced 50 per cent of the violence.

"Operationally, the Taliban has been displaced out of the built-up areas into... the more sparsely populated areas," he said.

Mr Smith said there was still some uncertainty about whether Australian Special Forces soldiers would stay in Afghanistan next year. That decision will be made pending discussions by the United States, Afghanistan, ISAF and NATO.

Daily life at Tarin Kot Kathy McLeish provides a snapshot of life for Australian troops deployed at Tarin Kot, where they bunk in vault-like rooms built to withstand rocket attacks.

The war in Afghanistan has also prompted the award of the first Army Battle Honour since the Vietnam War.

It will go to the Army's Special Operations Command to recognise the actions of the Special Air Service Regiment and the Second Commando Regiment during the Shah Wali Kot offensive in Afghanistan from May to June in 2010.

That was the battle which led to Ben Roberts-Smith being awarded the Victoria Cross.

General Hurley says he is delighted.

"Battle honours are a significant statement about the nature of the actual operation that these people and units were involved in and they mark a really strong mark in the history of any unit," he said.