Dacthal is used on crops such as broccoli, cauliflower, cabbage, turf and cotton, stopping weeds at the shooting or sprouting stage.
But it must be immediately pulled from sale across Australia after the pesticides authority on Thursday cancelled approval of all 12 products containing the herbicide.
Farmers must also halt use.
The weed killer is used on food crops such as broccoli, cauliflower and cabbage. (Joel Carrett/AAP PHOTOS)
It follows a similar emergency decision by US regulators on August 6 to protect pregnant women and their babies.
The US Environmental Protection Agency said unborn babies whose pregnant mothers were exposed to the chemical, sometimes without even knowing the exposure had occurred, could experience changes to fetal thyroid hormone levels.
Those changes were generally linked to low birth weight, impaired brain development, decreased IQ, and impaired motor skills later in life, some of which could be irreversible, it said.
The Australian Pesticides and Veterinary Medicines Authority said it had the power to act swiftly where it identified an imminent risk to human health.
"We are exercising that authority today with the cancellation of all products containing chlorthal dimethyl," chief executive officer Scott Hansen said.
"We understand the impact that this regulatory decision will have on industry, but the safety of people is of paramount importance."
Thursday's decision brought Australia into line with international counterparts, Mr Hansen said.
Pregnant mothers exposed to the chemical may result in health problems for their child. (Tracey Nearmy/AAP PHOTOS)
The US EPA estimates some pregnant women handling Dacthal products could be subjected to exposures four to 20 times greater than what that regulator estimates is safe for unborn babies.
Its assessment also found undue risk remains for days after an area is treated, not the 12 hours suggested on product labels.
New Zealand's pesticide regulator restricted but did not ban the product in September, forcing farms to keep pregnant women away from treated areas for five days.
Producer Amvac has proposed several changes to reduce the risks of Dacthal, including cancelling products used on turf, but has continued selling products for farms.
Farmers and retailers in possession of Dacthal, also known as DCPA, may continue to hold product until further notice, but must not use it.
A product recall will be organised in due course.
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