Australia will wind back its military operations against Islamic State after the Iraqi Prime Minister declared victory over the extremist group, which three years ago seized control of large swathes of the region.

Defence Minister Marise Payne announced on Friday that Australia's contribution to US-led coalition air strikes will end, while emphasising that other operations – including the training, advising and assisting of local forces – would continue.

Airstrikes target Islamic State positions on the edge of the Old City in Mosul, Iraq in July. Credit:Felipe Dana

"After more than three years of air operations, the number of coalition air strike commissions has steadily dropped since the last major population centre, Hawija, was captured in October," Senator Payne said.

"Following discussions with Iraq and with members of the international coalition, the Australian government has determined that we will bring home our six Super Hornet strike aircraft from the Middle East, marking the end of Australia's air strike operations in Iraq and Syria."