Products including tampons, sanitary napkins and menstrual cups will be included in the tax exemption.
Last year, these products earned the government around $40,000 in tax revenue -- with each item taxed at approximately five per cent.
The bill to scrap the 'tampon tax' came from a private members bill, and received all-party support.
New Democratic Party politician, Irene Mathyssen, who sponsored the private bill, says the outcome is a "victory for all women."
"The women who made this an issue, their voices have finally been heard."
The outcome follows a growing global push for governments to end taxing on menstrual products.
Australian treasurer Joe Hockey has said the federal government will look into whether sanitary items should be GST-free, during the next State treasurers' meeting in July.
