Replica injectable weight-loss drugs will be banned to protect Australians from severe side effects that have led to hospitalisation.

Medications that mimic appetite suppressant diabetes drugs Ozempic and Mounjaro will be prohibited from October.

About 20,000 Australians inject the imitation medication, leading to a rise in hospitalisations from adverse effects of the unregulated products.

An ABC investigation also revealed the imitation drugs were being illegally manufactured in Australia and exported overseas.

The injectable drugs are compounded medications, which are tailored for individual needs.

As a result of being tailored, the medications are not approved by the Therapeutic Goods Administration as safe for mass production and use.

Regulations introduced by the Albanese government will close a loophole allowing the production of the replicas and stop further misuse.

"This action will protect Australians from harm and save lives," Health Minister Mark Butler said.

"Australians should be able to have faith in the medications they use, including compounded medicines. This is a priority for the government."

Mr Butler assured Australians there was a place for compounded medications and those impacted would get assistance.

"While I understand that this action may concern some people, the risk of not acting is far greater," he said.

"You only have to look to the recent reports of individuals impacted by large-scale compounding to realise the dangers posed."

The four-month grace period before the ban takes effect is designed to allow affected patients a chance to speak with their doctors.

The medical regulator said it would work to support patients and provide guidance as people navigated the changes.