Peter Dutton has blocked a decision by Chief of Defence Angus Campbell to strip unit citations from special forces troops who served in Afghanistan.
More than 3000 soldiers will no longer have their awards taken away.
Instead, only those convicted of war crimes will lose their meritorious unit citations.
Mr Dutton said while it was important to ensure people who'd done the wrong thing were held to account, he did not want the many punished for the actions of a few.
"We shouldn't be punishing the 99 per cent for the sins of one per cent," the defence minister told 2GB radio.
General Campbell moved to strip special forces troops of their citations last year in response to the damning Brereton inquiry, which found evidence of war crimes committed in Afghanistan.
The report found up to 25 soldiers were involved in the alleged murders of at least 39 Afghan civilians and prisoners, and recommended charges be pursued against 19 of them.
The federal government paused the decision in response to widespread backlash and Mr Dutton has overturned it ahead of Anzac Day on 25 April.
"This says to people very clearly before Anzac Day that we want to reset, that we want to provide support to those people who have served our country, and who have died in that service," he said.
On Anzac Day, Mr Dutton said he shared the frustration of veterans told to register for services, while tens of thousands of people could freely attend football matches.
"I don't understand why you can have 30,000 people at a footy game but you can't have that same number at an Anzac Day service," he said.
Mr Dutton acknowledged it was an annoyance to register, but argued it was a necessary public health measure.
"I do want to see good numbers and I do want to see people register."
The minister also confirmed a start date for a royal commission into veteran suicides would soon be announced.
"It will be announced by the prime minister in the not-too-distant future," he said.
"We want that work to get underway and that's what will happen."
