Australia will withdraw 200 troops deployed to East Timor following February's attacks on the troubled country's president and prime minister, Prime Minister Kevin Rudd says.

Mr Rudd said the Australian and East Timorese governments had assessed the security situation as stable following the return home of East Timor's President Jose Ramos Horta and the lifting of a state of emergency.

The decision means a rifle company group will not be replaced when it completes its tour of duty on Sunday.

After the February 11 attacks, the Timorese government requested the immediate deployment of additional defence and police personnel. Mr Rudd said the force had successfully achieved its job of helping stabilise security in the country.

"Prime Minister (Xanana) Gusmao has written to me supporting this decision. He has thanked Australia for its assistance following the attacks and for our continuing support," Mr Rudd said in a statement.

The government has advised the United Nations and its partner in East Timor, New Zealand, of the decision.

After the removal of the extra troops, the Australian commitment will return to the pre-February level of approximately 750 personnel.

Mr Rudd said Australia remains strongly committed to supporting the Timorese government and will continue to work with authorities and the United Nations to help it handle security and other challenges.

Dr Ramos Horta was critically injured in the February 11 attack on his home by rebels led by Alfredo Reinado, who was killed in the shootout. The attacks also targeted Mr Gusmao, who escaped unharmed.

Dr Ramos Horta returned to the tiny country for the first time last week following treatment in Darwin.