Throughout 1944 and 1945, the formation's combat forces were greatly reduced and eventually it became a largely training and line of communications headquarters.

At this time, the formation's designation was changed to Second Army, when the commander of Allied land forces in the South West Pacific Area, General Thomas Blamey, gave it responsibility for land forces in the Australia's most populous areas: Victoria, South Australia and Tasmania, subsuming Southern Command.

Responsibility for central and southern New South Wales was assumed in August 1942, as a result of the movement of forces to Queensland and Western Australia.

After assuming control of the 1st, 10th and 1st Motor Divisions, the formation's headquarters moved to Parramatta, New South Wales, where it would remain until eventually disbanded after the war.

The formation oversaw the defence of several key areas in New South Wales including Sydney, Port Kembla, and Newcastle at this time, and also assumed responsibility for southern-based training and logistical support units.

The covering force assigned to Victoria was disbanded in April 1944 and two months later the 1st Division's strength fell to just one brigade.

[12] That month, Major General Herbert Lloyd assumed administrative command,[13] and he remained in the position until January 1946.