A report shows the number of adoptees was 13 per cent lower than in 2010-11 and 78 per cent less than in 1987-88.
THE number of children adopted by Australians has fallen to a historic low, with only 333 children adopted in 2011-12.
Experts believe it is because of the time it takes to adopt from overseas.
A report from the Australian Institute of Health and Welfare released on Friday shows the number of adoptees was 13 per cent lower than in 2010-11 and 78 per cent less than in 1987-88.
Adoptions Australia 2011-12 shows that it takes more than 4½ years for an overseas-born child to be placed with an Australian family once they have been approved. Placements took just over three years in 2007-08.
Ricky Brisson, executive officer of the inter-country adoption support network Australian Families for Children, said the time delays were frustrating for people who wanted to adopt from overseas.
''The government policies are hindering the process,'' she said. ''There are so many children who are not allowed to be adopted by Australian families. It's hard to adopt older kids, it's hard to adopt children with special needs, it's hard to adopt children in groups.''
Tim Beard, spokesman for the institute, said many of the complications with inter-country adoptions, including the number of applications and resources of the overseas authority, were beyond the government's control.
''Australian Central Authorities have maintained or improved the time taken to complete the aspects of intercountry adoption they are responsible for,'' Mr Beard said.
Federal Attorney-General Nicola Roxon closed Australia's adoption program with Ethiopia in June.
Of children adopted from overseas in 2011-12, 86 per cent came from Asia, 12 per cent from Africa and 2 per cent from Central or South America. The most common countries of origin were the Philippines, South Korea, China and Taiwan.
The adoption figures show Australian-born children outnumbered overseas children for the first time since 1998-99. Of the 333 adoptions, 184 were Australian, compared with 149 from overseas.
Mr Beard attributed this to a 10-year high in adoptions by ''known'' carers such as foster parents. Known carers accounted for 70 adoptions in 2011-12, up from 29 in 2002-03.
NSW Community Services Minister Pru Goward announced proposals in November that will make it easier for foster carers to adopt.
Child welfare group Barnardos Australia, which finalised 25 adoptions from foster care through its NSW-based Find A Family program this year, supports open adoption for children who cannot be restored to their birth families.
Almost 95 per cent of local adoptions finalised in 2011-12 were open, meaning all parties agreed to contact between the adoptive and birth families.
Economist Saul Eslake and his wife, Linda, adopted two children from China in 2004 and 2009. Mr Eslake said one reason for the drop in domestic adoptions was ''supply side'' while some prospective parents were deterred by the idea of open adoptions.