By Agence France-Presse
Customers of the US tech giant had complained to the Australian Competition and Consumer Commission (ACCC) after an operating system update disabled their devices in a global issue known as "error 53".
The users were told by Apple that they were not eligible for a remedy if the iPhone or iPad had been repaired by another company.
The ACCC took Apple to the Federal Court last year over allegedly false or misleading representations to customers with faulty iPhones and iPads about their rights under the law.
"If a product is faulty, customers are legally entitled to a repair or a replacement under the Australian Consumer Law, and sometimes even a refund," ACCC Commissioner Sarah Court said in a statement.
"The court declared the mere fact that an iPhone or iPad had been repaired by someone other than Apple did not, and could not, result in the consumer guarantees ceasing to apply, or the consumer's right to a remedy being extinguished."
Apple admitted misleading at least 275 Australian customers over the issue between February 2015 to February 2016 on its US website, by its Australian store staff and on its customer service phone calls.
The consumer watchdog said Apple had also committed to providing new devices as replacements, after allegations that the company was giving customers refurbished goods instead after a device suffered a major failure.
Apple said Tuesday that it had "very productive conversations with the ACCC" over the issue and vowed to offer its Australian users "excellent service".
It has previously described the error as appearing "when a device fails a security test" and released an operating system update to fix the issue.