The PNG Defence Force chief of staff says downsizing will pave the way for the development of younger soldiers.
The downsizing will see the force reduced from 3000 to 2000 men.
Captain Aloysius Tom Ur says the retrenchment exercise is to make the army more manageable and cost effective, but maintaining young soldiers in the army isn't easy.
"Our problem will be maintaining them - that's the problem. In terms of the financial cost of maintainig a defence force. We have a lot of young people out there, your talking about a nation of 5 million people, that's a lot of young people but we can't afford to have a big defence force."
Captain Tom Ur says currently the average age of soldiers in the force is 45 years of age, but he hopes to reduce the age to 35.
He says downsizing of the force is likely to be completed by the end of 2004.
