Chief of Defence David Hurley said today the soldier died during an insurgent engagement yesterday in which another soldier was shot and seriously wounded and an airman injured.
"Members of the patrol provided immediate first aid to the casualties," General Hurley told reporters in Canberra.
"Sadly, despite their efforts, they could not save one of their mates."
The special forces soldier who died, who has not been named, was on his fifth tour of Afghanistan and had previously served in Iraq and East Timor.
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The two others wounded in the attack are recovering in Afghanistan, with the soldier who was shot able to contact his family.
"As with each of these incidents, I will also appoint an inquiry officer to fully examine the circumstances surrounding this event," Hurley said.
The death comes as Australia is preparing to wind down operations in Afghanistan where its main base in Tarin Kot, Uruzgan province, is expected to close by the end of the year.
Australia still has some 1,550 troops in Afghanistan but plans to withdraw the bulk this year, earlier than planned due to security gains.