The department has asked the government of the Australian Capital Territory to study the possibility of moving the animals instead.
The kangaroos on the former naval base were going to be killed because they have become too numerous. The slaughter would have been carried out by tranquilizing the animals with darts and euthanizing them with a lethal drug.
A report to the ACT government released this month recommended the slaughter go ahead without delay to protect lowland native grasslands and threatened species, and said relocating them would be inhumane.
Scientists point out that eastern gray kangaroos are abundant and they are destroying the native grassland of threatened species such as the grassland earless dragon, striped legless lizard, golden sun moth and perunga grasshopper.
But the plan triggered international protests by animal rights activists - including celebrity rock stars Paul McCartney and Chrissie Hynde - and split Australians over the merits of killing their beloved national symbol to protect rare lizards and insects that share their grassy habitat.
More than 60 species of kangaroo exist throughout Australia, and while a few species are endangered, others have thrived on Outback land that has been cultivated for grazing. They now exist in huge groups, known as mobs.
Federal environment protection laws allows wild kangaroos to be hunted, and they are killed by licensed hunters under a quota system. The meat is used for human consumption and pet food, and the pelts for soft toys and other items.