Sydney – Australia will reduce its troop deployment to East Timor because of the improved security situation, Defence Minister Joel Fitzgibbon said Wednesday.

Australian troop numbers in the fledgling country peaked earlier this year in the wake of attacks on the tiny nation's president and prime minister.

The decision to bring 100 soldiers home by early next year, following the removal of 200 troops announced in April, will leave some 650 Australian military personnel on the island, Fitzgibbon said.

"The reduction in the total number of deployed personnel under Operation Astute is appropriate given improvements in the security situation in East Timor," he said in a statement.

The Australians have been serving alongside New Zealand soldiers in the International Stabilisation Force (ISF) which will number 790 personnel following the latest limited withdrawal.

Fitzgibbon said while the Australian and New Zealand soldiers would continue in their mission, Canberra had been encouraged by the growing ability of the East Timorese, with the support of the United Nations, to manage security.

"The East Timorese authorities have shown through their professional handling of the security situation that the time is now right for some drawdown of the Australian ISF presence," Fitzgibbon said.

Australia will maintain the ability to rapidly reinforce its troops at short notice, as it did following the assassination attempt on President Jose Ramos-Horta in February.

The Timorese government had requested the extra troops after Ramos-Horta was gunned down by rebel soldiers at his home on February 11, the same day that President Xanana Gusmao also survived a shooting attack.

"Australia remains committed to supporting the Government of East Timor in developing its Defence Force and maintaining security and stability," Fitzgibbon said.