The chewy raspberry-flavored "Red Skins" will now be called "Red Ripper," while the chocolate-flavored "Chicos" jelly babies will have their name changed to "Cheekies."
The decision to rebrand the lollies was made in June, with Nestle saying that it "acknowledges the need to ensure that nothing we do marginalizes our friends, neighbors, and colleagues."
"We hope Australians will support the evolution of these two much loved lollies – while the names are new, the lollies themselves remain unchanged," Nestle's confectionery general manager Chris O'Donnell said in a statement on Monday.
The term "redskins" is derogatory to Native Americans, while "Chico" is a Spanish word meaning small boy or child which can also be considered to have racist undertones. The candy, which is brown, is in the shape of a baby.