On 17 August 1945, the day after the Proclamation of Indonesian Independence, the Japanese ordered the PETA daidan to surrender and hand over their weapons, which most of them did.

Indonesia's inaugural President, Sukarno, supported the dissolution rather than turning the organisation into a national army as he feared allegations of collaboration had he allowed a Japanese-created militia to continue to exist.

It was staffed by some 2,000 Malays and Indians and modeled on the organization of the Indonesian PETA, intending to create a local pro-Japanese reserve force for the defense of Malaya and Singapore.

It was reinforced by the part-time Malayan Volunteer Corps (Japanese: マライ義勇隊, romanized: Marai Giyūtai) and recruitment of local Heiho started in January 1945.

After the surrender of Japan on 15 August 1945, the Malayan Volunteer Army began marching towards Kuala Lumpur before disbanding in northern Johor.