In the post-war years, as the focus of Australia's defence strategy shifted towards the maintenance of a strong Regular force, the corps' role declined and it was eventually disbanded in 1955.

[2][3] Consisting of a small cadre of permanent force warrant officers and senior non-commissioned officers, along with the Australian Staff Corps, the AIC was tasked with providing training to the part-time soldiers of the Citizen Force of all arms and services, including combat and technical branches.

[6] Throughout the Second World War, the corps was largely subsumed into the Second Australian Imperial Force, as instructors volunteered to serve overseas; upon the conclusion of the war, the AIC became part of the Interim Army that was established as Australia moved towards the establishment of the Australian Regular Army that would have precedence over the part-time elements that had previously been the focus of Australia's defence strategy.

After this, the role of the corps slowly diminished as various arms of the service raised their own schools, which became responsible for producing their own instructors and trainers.

The corps was officially disbanded on 19 May 1955, although according to historian Peter Dennis "for practical purposes it had ceased functioning several years earlier".