· In short: Australia Post will reduce the frequency of its letter service from Monday.

· Letter delivery will reduce to every second business day, with longer time frames for delivery.

· What's next? Australia Post intends to use the change to expand parcel collection and delivery options.

Australia Post will only deliver letters every second day from next week, as a generational shift in the nation's postal services takes effect.

From Monday, 98 per cent of locations will have letter delivery reduced to every second business day, and delivery times for ordinary letters will be extended by a business day.

That means within the same state, letter delivery times will be four or five business days, depending on location, and six to eight business days for interstate letters.

What's changing?

· Regular letters will only be delivered every second business day

· Delivery times for an ordinary letter will be extended by one business day

· Australia Post will seek to expand its parcel delivery and collection locations

· More convenient collection times will also be made more available

· Separately, the price of letter stamps is also being increased

A daily priority letter service will remain available for customers who need fast delivery of mail, at a higher cost.

Requirements for Australia Post to maintain a minimum presence nationally and in rural, regional and remote areas will remain unchanged.

Separately, Australia Post is raising the price of ordinary letter stamps from $1.20 to $1.50, and large letter stamps from $3.60 to $4.50.

The federal government agreed to change the law to loosen Australia Post's requirements for letter delivery, acknowledging Australians send far fewer letters than they used to.

The postal service had warned without the change its "long-term viability" was at risk.

Australia Post says the changes will allow it to focus on expanding parcel posting and collection places, which have become its major business.

Trials of the change resulted in postal workers being able to carry 20 per cent more parcels on each delivery.

Four in five households bought goods online last year, while letter volumes have fallen by about two-thirds since their peak in 2008.

Communications Minister Michelle Rowland said the way Australians used the national postal service had changed, and so Australia Post needed to be modernised.

"[These] changes reflect the way Australians now interact with Australia Post, and will help improve the company’s financial sustainability," Ms Rowland said.