Currently, Australians booked on flights overseas are not permitted to carry any containers which can contain more than 100 millilitres.
Transport minister Anthony Albanese says the easing of restrictions will make travel easier and less stressful for passengers.
"What this is about is ensuring that security is maintained but that the convenience of the travelling public is made much, much better," Mr Albanese told reporters.
"What this is also about is making sure that those people doing screening at our authorities concentrate on the real threats - are able to focus on the work that we want them to do.
The restrictions were introduced in 2006 after a failed attempt to blow up airliners travelling between Britain and North America using liquid explosives.
Each month at Sydney International Airport about 1250 duty