Most shoppers will pay 11 cents less for a litre of milk from today because the Government has abolished a levy introduced to help farmers adjust to changes in the dairy industry.
All major retailers say they will pass on the price cut.
But the Government has asked the Australian Competition and Consumer Commission to be on the lookout for shops that try to keep the saving for themselves.
Some retailers, such as discount chain Aldi, cut their prices early.
Woolworths, operator of Safeway supermarkets in Victoria, and Coles have already cut the price of their house brand milk.
Other brands will follow from today.
The Dairy Adjustment Levy was brought in in 2000 to help farmers adjust to deregulation in the dairy industry, including the removal of price-support measures.
