The job reductions will take by the end of the year and primarily affect workers in South Australia.
"Our focus is strategic and aimed at improving business efficiency so that we can continue to be highly competitive and 'fit for the future' in what is an increasingly tough market," said David Allott, chief executive officer of BAE Systems Australia.
"These are difficult decisions and we are mindful of the impact these reductions have on our team. Natural staff turnover and redeployment will be used where possible and we will do everything we can to support those employees who are affected."
The company expects the staff reduction and the relocation of its Land and Integrated Systems business from Mawson Lakes to the corporate headquarters in Edinburgh – both in South Australia – will save the company about $15 million.
Notable deaths of 2014 [PHOTOS]