By Sunday afternoon, Westpac, ANZ  and NAB had all followed suit, announcing they too would ditch the fee for cash withdrawals made by a customer from another bank.

Australians made more than 250 million ATM withdrawals from banks other than their own last year, Reserve Bank data shows.

Consumer group Choice said the flurry of decisions was "welcome news for consumers".

"With many of us struggling with the cost of living, no longer forking out $500 million to the banks each year to access our own money will be a welcome relief," spokesman Tom Godfrey said.

"After years of inaction, it's clear the major banks are desperate to convey a sense of competition while the Productivity Commission has the spotlight on them.

"While they're all in the mood to stop ripping off their customers, let's see them lower credit card interest rates and abolish excessive late payment fees."

In announcing the decision to axe the fee on Sunday, CBA group executive for retail banking services Matt Comyn said the bank was acting on consumer concerns.

"Australians have complained for some time about being charged fees for using another bank's ATM," he said in a statement on Sunday morning.

"As Australia's largest bank, with one of the largest branch and ATM networks, we think this change will benefit many Australians and hopefully demonstrate our willingness to listen and act on customer feedback."

Hot on CBA's heels, Westpac group executive for consumer banking, George Frazis, said at lunchtime that non-Westpac group customers would no longer be charged an ATM withdrawal fee when they used one of Westpac Group's 2925 ATMs.

He said the move would extend to non-Westpac customers using ATMs of St George, Bank of Melbourne and BankSA as well.

"We want all Australians, whether they are Westpac Group customers or not, to benefit from one of Australia's largest ATM networks," Mr Frazis said.

The move is expected to take several weeks to implement.

ANZ was quick out of the blocks as well, with  ANZ group executive Fred Ohlsson then announcing  his bank would be dropping the fee for use of the bank's 2300-plus machines from early October.

"While we had been actively working on how we provide fee-free ATMs for our customers, we have decided to remove these fees all together from October," he said in a statement.

CBA will ditch the $2 withdrawal fee for customers of other banks at its 3400 CommBank-branded ATMs. Bankwest ATMs and customers using overseas cards will still attract a fee.

NAB was the last of the big four to fall into line, with an announcement from chief customer officer Andrew Hagger.

"This is a good outcome for customers - we know it has been frustrating for them to be charged to withdraw their own money from an ATM," he said. 

Choice's Mr Godfrey said his organisation felt the domestic major banks were still not facing enough competition.  

"We have called repeatedly for an immediate review of banking sector competition to be run by the Productivity Commission and we think it's really important that has now got under way". 

He welcomed CBA being first mover on ATM fees while noting "this is one bank that needs a good news story", given recent controversies with CommInsure, the bank's financial planning division and its referral to the courts over alleged non-compliance with money-laundering legislation.

Earlier on Sunday, Comparison site RateCity also welcomed the moves, saying they were an "egalitarian decision".

The site's money editor Sally Tindall said the decision could collectively save Australians "hundreds of millions of dollars a year".

Treasurer Scott Morrison had called earlier on Sunday for the other big banks to follow CBA's lead, saying: "Australians are sick and tired of all of these fees that mount up."

ATM withdrawals have been steadily declining for several years, but until recently the number of machines around the country had continued to grow.

Banks and other owners of ATMs have said their returns from the machines are being crunched, as they spend more money on maintaining machines that are being used less. 

According to RBA data released in March, ATM withdrawals have slumped to their lowest levels in 15 years amid the wider shift towards a cashless economy. 

The number of ATM withdrawals in January fell by 7.7 per cent compared to last year. It follows two consecutive years of ATM withdrawals falling by more than 6 per cent as more shoppers use cards, including contactless payments, where they would have previously paid in cash.

An RBA publication last year found the average direct charge for a foreign withdrawal in July 2015 was $2.33, up from $2.04 in 2010 and $1.96 in 2009.

The move by CBA comes after the bank was last month embroiled in a scandal relating to alleged breaches of money laundering laws after allowing thousands of large cash deposits to wash through its ATMs.