The number of people diagnosed with HIV has dropped to an 18-year-low, largely due to a decline in the infection among gay and bisexual men, a study has shown.

HIV rates in Australia have dropped to an 18-year low, driven by a reduction in the number of gay and bisexual men diagnosed with the infection.

There were 835 people diagnosed with HIV in 2018, marking a 23 per cent decline over five years, according to research by the Kirby Institute at the University of New South Wales.

The report, released on Wednesday, showed the decline was largely due to a 30 per cent drop in the number of gay and bisexual men diagnosed with the disease.

There has been no similar decrease in diagnoses rates among heterosexuals or the indigenous population, the National HIV Quarterly Report revealed.

Professor Andrew Grulich from the Kirby Institute said the introduction of a HIV prevention drug - pre-exposure prophylaxis (PrEP) - in Australia in recent years had "turned the HIV epidemic in gay and bisexual men around".

PrEP is a pill that can be taken daily by HIV negative people to prevent the transmission of the disease and it has been available on the Pharmaceutical Benefits Scheme since April last year.

"With expanded PrEP access, and a continued focus on testing, treatment and condom promotion, we'll continue to see these encouraging declines," said Prof Grulich, head of the institute's HIV Epidemiology and Prevention Program.

When the drug was first introduced in NSW in 2016, there was a 30 per cent reduction in diagnosis rates in the year that followed, says Professor Rebecca Guy, who heads the Kirby Institute's Surveillance and Research Program.

In addition, early treatment has lowered HIV rates because it prevents transmission by lowering the virus' levels inside the body to a point it cannot be passed onto another person, Prof Guy said.

"It doesn't mean the person has been cured but the virus levels are so low it can't be detected and it's non infectious," Prof Guy told AAP.

The report has also revealed diagnoses attributable to heterosexual sex once made up approximately 20 per cent of overall cases each year, but this has increased to 25 per cent in the past two years due to the decline in HIV rates among gay and bisexual men.

Last year, 84 women and 34 Aboriginal or Torres Strait Islander people were diagnosed with HIV, the report said.

For heterosexuals, more programs are needed to raise awareness about condoms and testing, Prof Guy said.

"Often heterosexuals are diagnosed really late, about four years after infection, and they aren't offered HIV tests along with other tests for sexually transmitted infections," she said.

"They should be offered a full package of sexual health screening and this might help normalise it."

Meanwhile, a multi-pronged approach led by the Indigenous community needs to be pushed to address the high ratio of diagnoses among the indigenous population.

Half the cases of HIV among indigenous people occur within the gay and bisexual group, and the other half have acquired the infection through heterosexual transmission or drug use, Prof Guy said.

"Overall in Australia we are doing well, but we need to do more because there are a number of populations which haven't seen a decline," she said.