Woolworths, Big W and BWS liquor stores nationwide will stop giving out free plastic shopping bags within the next year.
The Woolworths Group, which also includes Dan Murphy's and Cellarmasters' liquor stores, plans to get rid of all single-use plastic bags by June 30 next year.
Instead shoppers will be offered reusable bags ranging from 15 cents to $2, although Big W may provide reusable bags at no extra cost.
The retail giant's chief executive said the group currently gives out more than 3.2 billion lightweight plastic bags a year.
"Today's commitment shows we are committed to taking our environmental and community responsibilities seriously," Brad Banducci said in a statement on Friday.
Jon Dee, the founder of the national anti-plastic bag campaign Do Something, said that this is the first big step by a major Australian retailer.
"This is the first move by a major retailer to get rid of plastic bags and we now need to see Coles make the same pledge," Mr Dee told AAP.
"Aldi took the lead when they set up here in 2001 because from day one they didn't give away free plastic bags."
Coles did not immediately respond when asked about its plans.
Mr Dee said lightweight plastic bags often end up polluting waterways and the ocean, killing and maiming marine animals.
Removing free bags will give shoppers an incentive to use their reusable bags, he added.
Greenpeace campaigner Samantha Wockner said Woolworths' move will have a significant positive impact on the environment, and urged governments to act on the issue.
"It's disappointing that leadership on this issue has come from a large supermarket chain rather than from our politicians," she said.