Paraquat and diquat will remain available for use after the Australian Pesticides and Veterinary Medicines Authority delivered its final decision on Tuesday following a 30-year review into the chemicals' impacts on human health and the environment.
"Both chemicals remain available for use with significant new restrictions on application rates and permitted uses," the chemical regulator's chief executive Scott Hansen said.
New restrictions mean backpack sprayers will be phased out for enclosed mixing and loading systems and more personal protection equipment will be required.
The maximum rate of application will also reduce from 1150 grams per hectare to 231g/ha, although technology-assisted spot-spraying will allow higher rates capped at 30 per cent of the total area.
Pesticide Action Australia executive director Josh Davis said the regulator's view on the products stood in contrast with Australia's leading neurologists and global experts.
The highly toxic herbicide linked to Parkinson's disease - which is used on crops such as cotton, rice and wheat - has been banned in about 70 countries, including China, the world's largest producer of the chemical.
He claimed a conflict of interest, saying the regulator is the only one in the OECD to be majority funded by the industry it regulated.
The National Farmers' Federation defended the APVMA's independence and said the products were critical for farmers during variable seasons and the growing demand for food and fibre.
While acknowledging community concern, president Hamish McIntyre said modern agricultural chemical use operates under strict science-based safeguards designed to protect farmers, workers, and the environment.
"No one wants to see farmers put at risk, and decisions must continue to be guided by robust scientific evidence," he said.
The regulator's new restrictions arose from detailed data showing acute toxicity risks for human handlers and impacts on animals foraging in treated areas.
"In making its decision, the APVMA found the weight of evidence does not show that paraquat exposure through approved uses increases the risk of developing Parkinson's disease," it said.
Grain Producers Australia said the decision ensured ongoing access to two critical weed management tools that underpinned minimum and no-till farming systems.
"These systems have delivered enormous productivity gains while helping growers protect their soils, conserve moisture and reduce their environmental footprint," GPA spokesman Andrew Weidemann said.
NSW Farmers President Xavier Martin said the decision raises serious and practical concerns for agricultural productivity, stewardship of the landscape and biosecurity.
“Farmers respect science - but we also need decisions that work in the paddock. Right now, there's a real risk we're being left without a tool we rely on, and without an equal replacement,” Mr Martin said.
“Reducing application rates to the point where these products are potentially no longer effective doesn’t remove any perceived risk - it removes a critical solution.”