The two Army Reserve soldiers had been charged with manslaughter over the deaths which occurred in February 2009 as special operations soldiers were clearing a compound in which they believed a Taliban leader was hiding.

Six civilians, including five children, died in the operation. Judge Advocate Brigadier Ian Westwood ruled at a pre-trial hearing that a court martial set down for mid-July should not go ahead.

"The ruling does not detract from the personal tragedy inherent in the prosecution's allegations or diminish the importance of the lives concerned," Westwood said.

The two Army Reservists, who were not identified, were among three Australian soldiers facing charges including manslaughter over the raid in restive Uruzgan province.

The case against the third soldier, the reservist's commanding officer, was set to follow after their trial.

Charges against the third man have not changed but prosecutors may now consider whether this trial should go ahead, or whether they should bring alternative charges against any of the three.

The Australia Defence Association, a military lobby group, welcomed the decision, but defended the process.

"There has always been two extremes in this argument that they shouldn't have been charged in the first place because things like this happen in every war, or that they were guilty of an atrocity, neither of which is true," the association's executive director Neil James said.

"Whilst it is hard on the soldiers concerned, the Australian Defence Force are not barbarians and, unlike the Taliban, we hold our people accountable.

"This unfortunate trial has been part of that accountability process, difficult though it is for the men concerned and their families."

Civilian deaths are a sensitive issue in Afghanistan, where foreign and Afghan soldiers are battling a Taliban insurgency.