Military-owned golf courses, islands and prime beachfront real estate will be put up for sale in an attempt to raise nearly $2 billion for the nation's defence forces.
A total of 64 sites will be fully or partly sold including the historic Victoria Barracks in Melbourne, Sydney and Brisbane.
Proceeds from the sales will all be reinvested in the military, Defence Minister Richard Marles said.
"Defence, as one of the largest owners of property in the country had a very significant estate, much of which was not being used," he told reporters in Canberra on Wednesday.
The sell-off is expected to rake in just under $2 billion for the federal government and save taxpayers another $100 million a year in maintenance costs for the ageing facilities.
The list of properties to be sold off includes Sydney's Victoria Barracks - a complex established in 1840 and located on a prime eastern suburbs site not far from the city centre.
Between 450 and 650 people are based at the barracks and will be relocated to other defence sites.
An unoccupied naval base on Sydney's Spectacle Island will also go under the hammer and HMAS Penguin, a navy diving base visible from the scenic Balmoral Beach, will be partially sold.
Melbourne's Victoria Barracks, another heritage-listed site that played a crucial role in both world wars with buildings dating back to 1850, will also go on sale along with three military-owned golf courses in Victoria and the ACT.
The defence estate review has recommended the sale of 68 properties in total, of which three have already been offloaded.
The government has decided to sell only part of another three sites including a dive-training site at Pittwater on Sydney's northern beaches, which was recommended for sale but will be retained because it hosts a "critical capability" that cannot easily be relocated.
Mr Marles did not deny the plan had been met with pushback among military brass.
"It's understandable that those who've served in the army, who are very passionate about the army ... will have emotional attachments to places they serve," he said.
"(But) the heritage value of these properties does not belong to the Australian Army, or for that matter, the Australian Defence Force.
"It belongs to the Australian people, and right now, the Australian people are prevented from seeing these properties."
The sell-off follows an audit of the defence estate, a sprawling network of hundreds of properties across the nation totalling around 3.8 million hectares.
The independent review found defence personnel should be relocated away from a number of historic properties to newer military buildings.
It also found some sites were currently vacant or unfit for use because of rusted and derelict buildings, black mould and chemical contamination.
All sites earmarked for sale will be handed over to the Finance Department over coming years, which will be responsible for finding a buyer.
Government officials believe some properties will likely take years to sell.
Buyers are likely to be a mix of state and territory governments, as well as private owners.
The proceeds of the sale, estimated to reach around $1.8 billion, will be reinvested into the ADF.
The opposition's initial response to the announcement has been one of scepticism, accusing the government of selling the properties to paper over budget deficits.
"The government needs to do this because they have a massive hole in their budget, spending like drunken sailors," Liberal senator Andrew Bragg told Sky News.
