Prime Minister Scott Morrison said on Wednesday that the move would come as no surprise to many because of tensions in the country’s relationship with China.
He said: “I’m doing it because it’s in Australia’s national interest. It’s the right thing to do.”
As with the US decision to withdraw its diplomats from the event, the Australian boycott still allows its athletes to compete.
As well as citing human rights abuses, Mr Morrison said a diplomatic row over “our decision to acquire nuclear-powered submarines” was also behind the move.
He said his government was very happy to talk to China about their differences.
“There’s been no obstacle to that occurring on our side, but the Chinese government has consistently not accepted those opportunities for us to meet,” Mr Morrison said.
The Australian Olympic Committee said the arrangements for the 40 or so Australian athletes expected to compete at the Games would not be impacted by Morrison’s announcement.
Human rights groups have pushed for a full boycott of the Games, which would mean athletes from the boycotting country not taking part.
China has been accused of systematic human rights abuses of the Uyghur minority in vast internment camps.
The Chinese regime has insisted the camps are “educational” centres.
After the White House announced on Monday it would boycott the Games, foreign ministry spokesperson Zhao Lijian told reporters the US will “pay a price”.
Other countries which have announced a diplomatic boycott of the Games are Lithuania and New Zealand, although New Zealand primarily cited Covid as the reason for not attending.
Britain and Japan have said they are still considering their positions.