The change means some games that were previously unavailable to adults can go on sale, whereas others that could be accessed by children will become restricted.
The issue had divided interest groups, with some claiming the new classification would protect children but others feared it would expose them to more violent games.
Legislation to approve the rating was passed by the Senate in June.
Under the previous classification regime, the highest rating for computer games was MA15+, meaning overseas adults-only games were either banned in Australia or given a lower classification, allowing children to obtain them.
South Australia's Attorney-General, John Rau, was among those who pushed for the changes.
He says the new ratings bring video game classification into line with the system applied to films.
"We've actually achieved a good balance where in effect MA15+ has become more restrictive and games that previously would have been in MA15+ are now going to be sitting in R18+," he said.
"It's a win for the gamers who wanted to have the opportunity as adults to purchase these games, but it's also a win for parents because they can be more confident that games that are age-inappropriate will not be available to people under 18."
Mr Rau says the rating does not mean obscenely violent or sexually explicit games, or games that depict drug use, will become available.
"The regime still contemplates that some games will be so unsatisfactory that they will be refused classification altogether. Now, that will continue," he said.