Australia Post will take longer to deliver letters under performance standards agreed with the federal government recognising its growing role in parcels.

From Monday, letters will be delivered only every second day instead of daily for 98 per cent of locations across Australia.

At the same time, Australia Post will have an extra day to deliver standard letters.

For example, a letter posted within a state should be delivered in four days, and no more than five days.

Between states, letter delivery should take between six to eight days.

The government-owned corporation will also be able to change how it manages priority mail, allowing it to deliver services “at a more commercial rate”.

Australia Post has welcomed the changes.

“This is a very significant day in the modernisation of Australia Post and we welcome the new regulations for letter delivery,” chief executive and managing director Paul Graham said.

“The new regulations will enable Australia Post to focus on what Australians want most; flexible and more reliable parcel deliveries with enhanced tracking technology and more delivery options.”

After trials last year, capital city households may already be familiar with the letter delivery extension.

But Communications Minister Michelle Rowland and Finance Minister Katy Gallagher reassured Australians that the minimum number of post offices across the nation won’t change

And posties will continue to deliver daily, although their deliveries will favour parcels.

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

According to Australia Post, four in five households bought something online in 2023 and 9.5 million received a parcel last year.

But letter volumes have declined by two-thirds since peaking in 2008.

Earlier this month, the price of a stamp for a standard letter rose to $1.50, from $1.20.

The average Australian sends about 15 small letters a year and receives about two letters a week. Australia Post expects that number to halve in five years.

In March, Australia Post reported a 2023 second half pre-tax profit of $33.6 million, up 42 per cent on the same period in 2022.

The rise was attributed to the delivery of almost 100 million parcels across Australia.

The letters business recorded a $182.1 million loss in the six months ended December, as letter volumes fell 11.9 per cent.

-with AAP