The July jobless rate compared with 4.9 percent in June and came in below the market consensus forecast of an unchanged result.
The Australian Bureau of Statistics said that on a seasonally adjusted basis the number of people employed surged by 50,700 to 10.2475 million compared with consensus forecasts of a 5,000 rise.
Prime Minister John Howard said the July result was the lowest unemployment rate since August 1976. The previous 30-year low of 4.8 percent came in May.
"It is a wonderful thing that the key social economic indiator should be so strong," Mr Howard said.
"The fundamental direction of unemployment in Australia today is providing great hope and it is a reflection of the strength of the economy and a reason that we should be optimistic.”
Full-time employment increased 27,100 to 7.305 million and part-time employment rose 23,600 to 2.942 million, the ABS said.