Indonesia has suspended all military co-operation with Australia, saying "a lot of things needed to be improved", according to BBC.
Army spokesman Maj Gen Wuryanto said the halt came into force in December and a broad range of activities were affected, including joint training.
Australian Defence officials confirmed Indonesia had halted all defence co-operation over "teaching materials".
Bilateral relations have been tense at times in recent years, although there were recent signs of improvement.
"All forms of co-operation with the Australian military, including joint training, have been temporarily withheld. I hope it can be resolved as soon as possible," Maj Gen Wuryanto said.
Australia's Defence Minister Marise Payne said later in a statement: "Late last year concerns were raised by an Indonesian TNI (Indonesian National Armed Forces) officer about some teaching materials and remarks at an Army language training facility in Australia."