The move comes after a comprehensive review of advisers, which examined the role of each adviser position to ensure that its allocation was an effective response to meeting agreed development needs and priorities.

Australian Foreign Minister Kevin Rudd said he had discussed the review report with PNG counterpart Sam Abal this week and both had agreed the cuts would ensure a more targeted allocation of advisers and a reduction in the level of advisory support.

"The Australian government is committed to strengthening the aid program and ensuring value-for-money across all the development assistance programs," Rudd said.

The review confirmed that advisers deployed in a targeted and cost-effective way could be a valued and effective part of Australia's aid to PNG.

As an example, it pointed to AusAID helping to carry out a measles immunisation program that ensured 81% of children from a target of 1.148 million were vaccinated against measles and other childhood diseases.

The review also noted that the need to build up skills remained a high priority over the next decade, particularly as the PNG LNG liquefied natural gas project would require a skilled workforce.

"Australia remains committed to assisting PNG with the effective delivery of the LNG project, and will continue to work separately with PNG on addressing some immediate capacity gaps," Rudd said.