A controversial plan to make women wearing the burqa or niqab sit in separate glassed public enclosures at Australia's Parliament House due to security concerns was abandoned Monday after an outcry.

The backdown followed a decision on October 2 by Speaker Bronwyn Bishop and Senate President Stephen Parry to seat people wearing face coverings in areas normally reserved for noisy school children while visiting parliament.

It followed heated debate about potential security risks since the rise of the Islamic State organisation.

The ruling was condemned by human rights and race discrimination groups.

Race discrimination commissioner Tim Soutphommasane told Fairfax Media the original ruling meant Muslim women were being treated differently to non-Muslim women.

"No-one should be treated like a second-class citizen, not least in the parliament," he said.

"I have yet to see any expert opinion or analysis to date which indicates that the burqa or the niqab represents an additional or special security threat."

Labor opposition frontbencher Tony Burke welcomed the backdown but said the initial decision should never have been made.

"What possessed them to think that segregation was a good idea?" he said.

"Segregation was previously introduced, apparently, with no security advice attached to it and no security reason attached to it."

The Department of Parliamentary Services said in a statement that the rules had been changed and all visitors must now "temporarily remove any coverings" that prevent the recognition of facial features.

"This will enable security staff to identify anyone who may have been banned from entering the building or who may be known to be a security risk," it said.

"Once this process has taken place visitors are free to move about the public spaces of the building, including all chamber galleries, with facial coverings in place".

Australia has been on edge since the rise of IS with the government tightening counter-terrorism laws and police in recent weeks conducting major terror raids amid fears of an attack on home soil by radicalised Australians.

The country was one of the first nations to join the United States' aerial campaign against the militant group, which controls large parts of Iraq and Syria and is increasingly seen as a global threat.

On Sunday, Canberra said it had reached a deal with Baghdad for the deployment of about 200 special forces to assist Iraqi troops in their fight against jihadists.