There are 95,000 workers on 457 visas at the moment - less than one per cent of the workforce.
The Business Council of Australia said the cancellation of the 457 program will help rebuild public confidence. The majority of the visa holders under this category were from India, accounting nearly a quarter of the intake.
On the same day that US President Donald Trump was expected to order a review of the popular H-1B visa program, Australian Prime Minister Malcolm Turnbull put up his own wall.
"Australians must have priority for Australian jobs - so we're abolishing the 457 visas", he said.
The country issued 45,400 457 visas last fiscal year, and including family members there are 94,890 people holding them, according to the Australian Broadcasting Corp .
In a Facebook video posted on Tuesday (18 April), Turnbull stressed that visa reforms will focus on "Australian jobs and Australian value".
In Australia, the number of jobs eligible for temporary working visas has been dropped, with 216 occupations cut from 651 professions previously eligible for a 457 visa.
The two new visa schemes will have stringent measures and require foreigners to have better work skills as well as English language proficiency, he said.
"The government will deny their tough talk on immigration and plan to ban 457 visas is because of One Nation but we all know the truth!"
Whilst the change in the scheme is immediate to a new temporary visa targeting local opportunities, those workers now on 457 visas in racing stables across the country are not at risk.
Minerals Council of Australia chief executive Brendan Pearson said the mining industry's use of temporary skilled migration had declined by almost 70 per cent over the past three years as skills shortages eased.
India accounted for about 25% of the foreign citizens participating in the program, followed by the United Kingdom (20%) and China (6%).
Immigration Minister Peter Dutton said that for the two-year stream, which could be renewed for two years, "there won't be permanent residency outcomes at the end of that".
The Australian government, however, assured expats that the 95 000 people already in Australia on 457 visas will not now be affected by the change.