BP is cease production at its Bulwer Island refinery in Brisbane by 2015. The closure is expected to lead to the loss of 350 jobs.
The company said said the growth of large refineries in Asia created "structural change" that made smaller refineries like Bulwer unprofitable.
The refinery, which was built in the 1960s, has the capacity to produce 102,000 barrels of fuel per day.
BP said it was considering turning the facility into an import terminal.
The BBC reports Royal Dutch Shell said earlier this year that it was exiting the refining industry in Australia and Caltex Australia said it would convert its Sydney refinery to an import terminal.