Defence Minister Phil Goff says about 45 armoured personnel carriers are likely to be scrapped after their sale to a private collector was blocked by the United States.
The M113 APCs were withdrawn from service in 2004 and replaced by the Light Armoured Vehicle. A condition of the original purchase, in the 1960s, was approval from the US State Department in the event of any future sale.
Goff says the sale to an Australian collector was declined due to the post-September 11, 2001 environment, and scrapping the vehicles for metal is now the only option.
Goff says while it is disappointing for the collector, the APCs were never going to be worth a lot of money on resale.
He says 15 of the vehicles will be kept for museums and defence force bases around the country.