With the handover of the base in Uruzgan province, about 1,000 of the 1,600 Australian troops in Afghanistan will return home, Gillard said.
Australia had promised a complete transition of power by the end of 2014, News Limited Network reported.
"In April last year I indicated that we would move into transition in our work in Uruzgan province,'' Gillard said, speaking from Perth, Australia. ''We are well into transition now."
Australians have two bases at Multi National Base Tarin Kowt -- Camp Russell, home to Australian Special Operations Task Group; and Camp Holland, where the remainder of Australia's military and civilian personnel are based, News Limited Network reported.
The plan is to transfer all of Camp Russell and a portion of Camp Holland to Afghanistan by the end of 2013. Once the base closes, some Australian troops will remain in Kandahar and Kabul through 2014, though the number of troops hasn't been determined, Defense Minister Stephen Smith said.