The announcement prompted a furious response from China, which warned of "serious harm" in the already fractured relationship.
China has also accused some officers of Australia of "cold war mindset" and "ideological discrimination", vowing that the country will "indefinitely suspend all activities under the framework" under this agreement.
Chinese officials and academics told the state-run Global Times on Thursday that suspending the China-Australia Strategic Economic Dialogue was a "substantial and resolute response" to Australian "aggression", sending a "clear signal" to Canberra that Beijing will "take all necessary moves to defend its national interests in response to Australia's provocations".
Relations between Beijing and Canberra have particularly been intensified since Australian Prime Minister Scott Morrison called for an global investigation into the origins of COVID-19 a year ago.
Newly-appointed Trade Minister Dan Tehan said he was seeking relationship-saving discussions, something his predecessor, Simon Birmingham, failed to do.
Coal operations at the Port of Newcastle in New South Wales, Australia on November 18.
Canberra has previously described the China-Australia Strategic Economic Dialogue as one of the "premier bilateral economic meetings with China".
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The first meeting in 2014 was called a chance for "closer economic ties" by Canberra.
Xi Jinping's CPC government continues to disapprove of Canberra's ongoing stance on China's behaviour in the region.
Meanwhile, China had said that Australia's decision to cancel agreements between Beijing's flagship Belt and Road Initiative and the state of Victoria was among several "negative moves" that had hurt bilateral relations.
Further, dialogue between Australian ministers and their Chinese counterparts has been largely non-existent over the past year, as Beijing's trade war against Australia ran its course. Beijing has dismissed the claims as unfounded.
China is Australia's No. 1 foreign market, but the sanctions impact has been limited because Chinese steel mills still buy Australian iron ore, the country's most valuable export.
Defense minister Peter Dutton told the Sydney Morning Herald his department had been asked to "come back with some advice" about the 2015 deal and refused to rule out forcing Chinese firm Landbridge to divest on national security grounds.
China announced on Thursday the suspension of its economic dialogue agreement with Australia.