Concerns over the ships' cost and technological risk led the government to cancel the DDL project in 1973 on the RAN's advice, and a variant of the United States' Oliver Hazard Perry-class frigate was procured instead.

During this period, Australian minesweepers and frigates patrolled Malaysia's coastline to counter Indonesian infiltration parties travelling in small craft.

[4] When the DDL project began in 1966, the ships' role was to support patrol boats during anti-infiltration operations and complement the Navy's existing destroyer force.

The initial specification was for a 1,000-ton escort vessel[9] and in an early design the class was to have a single 5-inch (127 mm) gun as its primary armament and carry a helicopter.

These studies found that including an area air defence capability and an ability to operate two helicopters greatly improved the DDL's effectiveness.

[13] By this time the design had evolved to specify a general-purpose destroyer of 4,200 tons, armed with a five-inch gun and a Tartar missile launcher, and capable of operating two helicopters.

[12] These changes were made without regard for costs, as the team tasked with developing the specifications was not also responsible for the ships' final price and delivery schedule.

[18][19] The DDL design was not supported by the Australian Labor Party (ALP) opposition, which believed that the ships would be too large and expensive for escort, patrol and surveillance duties.

[20] In June 1972 The Australian Quarterly published an article by the shadow minister for Defence, Lance Barnard, in which he argued that "the DDL concept goes completely against trends in the development of vessels for maritime warfare", and that the high cost of the warships would mean that not enough would be purchased to meet the RAN's requirements.

Barnard suggested that if the DDL project was cancelled the RAN's needs could be met at a lower cost by selecting from one of several existing foreign designs for smaller, but just as well armed, destroyers and building these ships under licence in Australia.

The Navy also reviewed the project and found that it was unduly expensive, and a joint parliamentary committee concluded that a unique Australian design entailed significant technological risks.

[8][27] Australian industry was also left with a bad impression as companies involved in the project had devoted considerable resources to preparing tenders for the DDL.

[28] Y-ARD greatly reduced its presence in Australia, and the Australian naval design experts it had employed were offered jobs in the United Kingdom.

[17] Despite cancelling the DDL project, the government endorsed the RAN's requirement for new destroyer-type warships and requested a review of existing foreign designs to find a replacement.

[30] A large number of designs were studied by the project office, and the United States' Oliver Hazard Perry-class frigates and a variant of the British Type 42 destroyer armed with SM-1 surface to air missiles were eventually short listed for detailed evaluation.