The decision to restore $25.5 million over two years to legal aid commissions, community legal centres and indigenous legal service providers was made on Thursday, following a significant public backlash.

Federal Attorney-General George Brandis and Minister Assisting the Prime Minister for Women Michaelia Cash spoke of the importance of fighting domestic violence while announcing the funding backflip.

The cuts threatened to have a major impact on the already stretched Legal Aid ACT, as well as community legal centres like the Women's Legal Centre and the Aboriginal Legal Service.

There were fears of lay-offs, the cutting of services, and that many vulnerable Canberrans would be turned away.

Aboriginal Legal Service NSW and ACT chief executive officer Phil Naden welcomed the announcement with "jubilation and elation".

"At this point in time it's a bit of a reprieve, so we can go back to the board and we can go back to the community and think about what we can offer and rebuild."

Mr Naden said looming cuts had forced the organisation to scrap its Family Law Practice, which affected 12 staff and 800 clients across the two jurisdictions.

The funding backflip meant Mr Naden would now make strong recommendations that the practice reopen to cater to a growing number of clients affected by family violence.

"To have this money allocated for this type of service delivery is vital for family law services," he said.

"[Family violence] is rife in our community and we need to be part of the solution defending these matters."

ACT Bar Association president Shane Gill said the decision was a relief for the sector, which he said was already struggling with "grossly inadequate funding".

"The legal aid system provides representation for people in terrible and vulnerable situations," he said.

"How we treat the vulnerable in our community is a strong indicator of what we are as a society."

ACT Attorney-General Simon Corbell has been vocal in his opposition to the federal cuts, speaking out against the decision at a ceremony to start the legal year and last month joining other state and territory attorneys-general to write to Mr Brandis.

He welcomed the decision on Thursday, but said he would wait to see the final impact on the base funding provided to the ACT.

"I welcome the federal government's recognition of the critical role these services play in addressing the needs of vulnerable people in Canberra, particularly in the area of domestic violence," he said.

"We have recently heard the community's concern regarding domestic violence and the essential support services victims need."

The federal government has decided to push ahead with cuts to advocacy services, and not to restore funding to the Environmental Defenders Office, which represents those who can't afford legal action for environmental matters.

The ACT office's principal solicitor Camilla Taylor said the organisation was stunned that it had missed out on the restored funding.

"There is no basis to distinguish between EDOs and other community legal services delivering access to justice," she said.

"In fact, the Attorney-General's decision contradicts recent recommendations of the Productivity Commission to restore EDO funding, in light of our critical role in protecting public health and matters of national environmental significance."

The organisation had put together a pre-budget submission and Ms Taylor was "very hopeful" of support from the ACT government.

Mr Corbell echoed the disappointment with the decision to push ahead with cuts to advocacy services and the Environmental Defenders Office.

"Today's announcement does not cover the important advocacy work of organisations such as the Environment Defenders Office," he said.

"This advocacy work plays an important role in ensuring a robust legal system and I urge the Commonwealth to reconsider its funding stance."

Law Society president Martin Hockridge said the proposed cuts to legal aid would have caused serious problems, including for domestic violence victims.

He said Legal Aid ACT was critical in assisting such victims, particularly in a small jurisdiction like the ACT.

"In terms of actual litigation in the Magistrates Court, around orders restricting partners and ex partners to stay away, they are predominantly supported by Legal Aid," he said.

"It's critical funding, if there were to be a decrease in the level of rep available to victims in the courts, then that was going to be a serious problem."