Kids will no longer feature in advertisements, which show sexual imagery or indicate children in a sexual way under new rules to be introduced.
The Australian Association of National Advertisers (AANA) announced that it would make changes to the advertising code following submissions and complaints over the use of children in some advertising.
The new changes mean that those aged 14 and under will not appear in advertising - both broadcasting and print - that portrays them in a sexual way, or has a theme of sexualisation.
Besides this, ads must also not state or imply that owning a product will enhance a child's sexuality.
AANA chairman Ian Alwill said the new changes would meet the expectations of the Australian community.
"The review has taken note of widespread community concerns, particularly around the sexualisation of children and the portrayal of body image, and we have responded accordingly," News.com.au quoted Alwill, as saying.
The new changes come as a senate inquiry, due to report by the end of June, probes sources of premature sexualisation of kids in mainstream media.
The new code also changed rules relating to the 'pester power' of their children, and a ban on advertising that encourages children to actively seek out approval to buy from their parents.
AANA said that major food and beverage advertisers were working with international codes and nutrition guidelines to make sure ads directed at children aligned with industry standards.