From Monday, letters will be delivered every second day instead of every day for 98 per cent of locations across Australia.
At the same time, Australia Post will have an extra day to deliver standard letters.
For example, a letter posted within a state should be delivered in four days, and no more than five days.
Between states, letter delivery should take between six to eight days.
The government-owned corporation will also be able to change how it manages priority mail, allowing it to deliver services "at a more commercial rate".
A letter posted within a state should be delivered in four days, and no more than five days. (Dan Himbrechts/AAP PHOTOS)
After trials were set up last year, capital city households may already be familiar with the letter delivery extension.
But Communications Minister Michelle Rowland and Finance Minister Katy Gallagher reassured Australians that the minimum number of post offices across the nation won't change
And posties will continue to deliver daily, although their deliveries will favour parcels.
"These changes reflect the way Australians now interact with Australia Post, and will help improve the company's financial sustainability," Ms Rowland said.
According to Australia Post, four in five households bought something online in 2023 and 9.5 million received a parcel last year.Â
But letter volumes have declined by two-thirds since peaking in 2008.
Earlier this month, the price of a stamp for a standard letter rose to $1.50, from $1.20.
The average Australian sends about 15 small letters a year and receives about two letters a week.
In March, Australia Post reported a 2023 second half pre-tax profit of $33.6 million, up 42 per cent on the same period in 2022.
The rise was attributed to the delivery of almost 100 million parcels across Australia.
The letters business recorded a $182.1 million loss in the six months ended December, as letter volumes fell 11.9 per cent.
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