The series, which attracted up to 2.8m viewers back in 2001, is now averaging little more than 1m viewers an episode.
It will end next Monday when the series eight winner is announced.
Programmers at Channel 10 reportedly made the decision late last week with the backing of 10's board. Southern Star Endemol, the producer of the show, was then informed but the news was not announced until Monday.
David Mott, Channel 10's programming chief, told News.com.au: "This decision has been going back and forth for some time and we have been having a very close look at it.
"But it has still been a tough call, and while the numbers are still working it is now time for us to move forward."
'Big Brother', which costs Channel 10 about A$25m a year, will be put on the market by Southern Star after it wraps up on July 21. Potential buyers include commercial broadcasters Seven and Nine or the pay TV operator Foxtel.
The announcement follows last week's appearance by Anderson, who was reportedly paid A$500,000 (£244,000) for the three-day stint.
Anderson, who campaigns for , was unaware that was a major sponsor of the Australian series and after leaving the house, she visited an Australian KFC restaurant to protest against the company's treatment of chickens.
'Big Brother' in the UK, currently in its ninth series, has been pulling in an average of 3.3m viewers for Channel 4. The programme is due to run until 2010 according to Channel 4's current deal with Endemol.
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