When military dog Kuga and his special operations handler Sergeant J were choppered into Khaz Uruzgan in Afghanistan on a mission to locate a high-value Taliban target, they didn't know they were walking into an ambush.

Key points: Kuga is the first Australian dog to be awarded the Dickin Medal for animal gallantry

Kuga is the first Australian dog to be awarded the Dickin Medal for animal gallantry Kuga was shot five times during a Taliban ambush in 2011

Kuga was shot five times during a Taliban ambush in 2011 He was treated by vets in three countries, but died almost a year after being injured

Nor did they know Kuga's bravery on that day in August 2011 would make him the first Australian animal since World War II to be honoured with the Dickin Medal, known as the Victoria Cross for animals.

"I let Kuga off to patrol ahead and scout," Sergeant J said.

Before long, the Malinois indicated he could sense something lying in wait.

Kuga was gravely wounded in Afghanistan seven years ago. ( Supplied: Defence )

"[He] pushed off to the left and down into a creek bank and I sort of lost sight of him," Sergeant J said.

"As Kuga was starting to swim across the river, that's when the first burst of automatic gunfire came in around him.

"I could see the rounds kicking up around him in the water."

Despite the gunfire, Kuga pushed on to the other side of the river, where he charged the shooter, and grabbed onto him.

"That forced that insurgent to target him as opposed to targeting us," Sergeant J said.

"The insurgent had an AK-47, and managed to get a shot onto Kuga, which forced him to let his grip go."

The insurgent escaped, but not before Kuga was shot five times and sustained shrapnel wounds to much of his body.

But he didn't give up.

"Kuga was there, he was sort of sitting there I could see his leg was broken," Sergeant J said.

"I thought I'd give it a chance and see if he'd come if I called him."

Kuga's injuries were treated in Germany and Australia. ( Supplied: Defence )

Slowly, the injured dog made his way to the water's edge and swam back to his handler.

Despite Kuga's serious wounds, nobody gave up on the dog.

Sergeant J provided immediate care, and an emergency medical evacuation was called in.

"He was in a pretty bad way at that point," the handler said.

Kuga spent the next nine months with vets in Afghanistan, Germany and Australia, who treated him and attempted to rehabilitate him.

But the stress the injuries and recovery process placed on him proved too much, and he died in July 2012.

'He saved lives that day'

Mark Donaldson VC and military dog Odin accepted the medal on Kuga's behalf. ( ABC News: Jordan Hayne )

On Friday Kuga became the first Australian dog to be awarded the Dickin Medal, which recognises the gallantry of animals during war service.

The only other Australian animals recognised by the medal are two carrier pigeons that served in World War II, the last of which was recognised in 1947.

Mary Reilly from the People's Dispensary for Sick Animals (PDSA), which awards the Dickin Medal, said it was given out very rarely for only the most conspicuous bravery among animals.

"Kuga's sacrifice was an ultimate sacrifice," she said.

"The reason he got the Dickin Medal was he just was so courageous.

"It has become known as the animals' Victoria Cross."

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Victoria Cross recipient and former military dog handler Mark Donaldson VC accepted the medal with service dog Odin on Kuga's behalf.

"I personally am of the opinion that he saved lives that day," he said.

"The ambush would not have been sprung early enough so they would have stumbled into that killing zone.

"If you take Kuga out of the equation … with reasonable doubt they wouldn't have known the enemy was there."

Kuga's medal will be displayed at the Australian War Memorial in Canberra from next year.

"I'm pretty proud of what Kuga did that day," Sergeant J said.

"He's the one who chose to go forward, he's the one who chose to take bullets for both me and my mates.

"Ultimately that enabled me to come home to my family."