Foreign Minister Julie Bishop has described the liberation of the IS stronghold of Raqqa in Syria as a “major breakthrough” in the fight against terrorism.
Ms Bishop confirmed the Royal Australian Air Force (RAAF) provided support as part of the anti-IS international coalition.
The so-called caliphate has now lost its second de-facto capital following the fall of Mosul in Iraq in July.
“It means that it does not have a headquarters in Syria and Iraq,” Ms Bishop said.
After a four-month battle for Raqqa the Syrian Democratic Forces declared victory on Tuesday as it set about clearing stadiums of mines and any remaining IS militants.
Defence Minister Marise Payne told parliament on Wednesday the capture of Raqqa was "devastating blow" to IS and its ideology.
"A total victory in Raqqa will discredit Daesh (IS) worldwide," Senator Payne said.
"The majority of the city has been liberated but there are isolated pockets of stiff resistance remaining," Senator Payne said, adding that some parts were still unsafe for civilians to return home.
Ms Bishop confirmed about 80 Australians, believed to be part of the terrorist group in the region, have been killed and a further 110 are being tracked as the group fled south.
“ISIS is now on the run," she said.
“Our focus, of course, has been to defeat ISIS. Because that is in our national interest to prevent terrorism spreading from the Middle East to our part of the world.”
Australia has been providing surveillance assistance to the Philippines during a five-month battle to retake the southern city of Marawi from pro-IS militants.
Philippines President Rodrigo Duterte declared the city liberated on Tuesday.
"It's been a very difficult fight over the past five months," Senator Payne said.
She will travel to Manila next week for a meeting of southeast Asian defence ministers.
