The world's biggest coral reef ecosystem, which has had World Heritage Site status since 1981, has been under increasing threat from climate change, farming run-off, development and the coral-eating crown-of-thorns starfish.
"This is a tremendous decision," Environment Minister Greg Hunt told the Australian Broadcasting Corporation from Germany, where UNESCO made its decision late Wednesday, adding that Canberra had "clearly heard the concerns of the World Heritage Committee".
Ahead of the decision, UNESCO commended Australia's recent efforts on working to ban the dumping of dredge spoil in the marine park, to limit port development and improve water quality.
He added that more than Aus$2.0 billion (US$1.53 billion) had been committed to protect the reef over the next decade.
The decision by the United Nations Educational, Scientific and Cultural Organisation will see the reef -- a major tourist attraction off the Queensland coast -- remain under surveillance but not listed as endangered.
Putting it on the "in danger" list would have been a huge embarrassment for Australia with the World Heritage Committee able to develop and adopt a programme for corrective measures.
Queensland state's Deputy Premier Jackie Trad, who travelled with Hunt to the UNESCO meeting in Bonn, said: "We know that the real work starts now.
"We have a strong suite of plans and commitments and they all need to be implemented to ensure that we can come back to... Report positively."
Trad praised the efforts of civil society groups and environmental activists in calling attention to the reef's condition, which was described as "poor" in an August 2014 Australian government report.
"The (World Heritage) Committee must continue to play this crucial role holding the Australian and Queensland governments to account and ensuring that promises are translated into real action and improvements in the health of the reef," WWF-Australia chief executive Dermot O'Gorman said.
Greenpeace warned that the reef, which runs along Australia's resources-rich northeast coast, would not be fully protected unless the country drops all expansion plans for coal and port developments in the area.
Australia last year gave the green light to a Aus$16.5 billion mine development by India's Adani Group near the Great Barrier Reef.
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