"I have today issued a compulsory recall notice for vehicles fitted with defective Takata airbags, following an extensive safety investigation by the Australian Competition and Consumer Commission", Mr Sukkar said.
Worldwide at least 23 deaths and more than 230 serious injuries have been reported in connection with the Takata airbags, Sukkar said, with a man killed in Australia a year ago.
The explosion propels shrapnel into the driver and passengers' eyes, faces, necks and chests.
"It's the safety of all Australians which is the first priority of this government", said Michael Sukkar, Assistant Minister to the Treasurer, adding that previous voluntary recalls have been ineffective.
"Drivers are strongly urged to check whether their motor vehicle has been recalled to replace faulty Takata airbags", ACCC wrote at the time.
Some drivers voiced their frustration on social media upon news of the mandatory recall, saying they had been waiting months for their auto manufacturer to replace the airbags.
Given the scale of the task, suppliers have until the end of December 2020 to progressively replace all defective airbags made by the Japanese group.
The tally of affected vehicles worldwide now exceeds 100 million units.
"The Transport Agency has information on our website for anyone concerned that their vehicle may be affected by the issues relating to the Takata recall".
Vehicles older than six years are at a higher risk.
But about 450,000 airbags were replaced with a like-for-like airbag that need to be removed.
Another 450,000 airbags that were already replaced with a like-for-like replacement are also part of the compulsory recall.
Wednesday's announcement followed an investigation by Australia's consumer watchdog, the Treasury said.
Here's part of list, featuring cars on the previous voluntary recall, published by Choice past year.
It's reported more than two million vehicles, which are fitted with potentially deadly Takata airbags, will be involved in the recall.
"The safety of all Australians is the highest priority of the Federal Government".
In the biggest bankruptcy of a Japanese manufacturer, Takata sought court protection from creditors in June as costs and liabilities mounted from nearly a decade of recalls and lawsuits.
"It is an indictment of this government that they have taken so long to pull the trigger on a compulsory recall".
The company has pleaded guilty to corporate criminal charges and agreed to pay a $1 billion fine in the U.S. It filed for bankruptcy a year ago and much of its operations are being taken over by Key Safety Systems, a Chinese-owned company based in MI.
A report by an independent monitor said that as of September 15, 2017, automakers had replaced only 43 per cent since Takata recalls began in 2001.