AUSTRALIAN soldier Mark Donaldson has been awarded the nation's first Victoria Cross in 40 years for gallantry in Afghanistan.

Trooper Donaldson receives the award for his rescue of a coalition forces interpreter from heavy fire in Oruzgan Province in Afghanistan.
The award for exceptional bravery is the 96th Victoria Cross to be conferred on an Australian soldier.

The investiture at Government House, attended by Governor-General Quentin Bryce and Prime Minister Kevin Rudd, on Friday was told that on numerous occasions Trooper Donaldson deliberately drew enemy fire in order to allow wounded soldiers to be removed to safety.

"As the battle raged around him he saw that the coalition force interpreter was lying motionless on exposed ground," the governor-general's official secretary Stephen Brady told the gathering.

"With complete disregard for his own safety on his own initiative and alone, Trooper Donaldson ran back 80 metres across exposed ground to rescue the interpreter and carry him back to a vehicle.

"Trooper Donaldson then rejoined his patrol and then continued to engage the enemy while remaining exposed to heavy enemy fire."

It is the first Victoria Cross for Australia, established in 1991 to replace the Imperial Victoria Cross, to be awarded.

Ms Bryce described Trooper Donaldson as an "inspiration".

"We gather around you to distinguish your actions, and to honour the individual they speak of, the person you are, your undertaking, your way of living," she said after the presentation.

"We are here to dedicate your contribution, your unconditional surrender to duty and humanity, your abandonment of your own necessity so that others may be secured."

"By your doing and knowing, you will shoulder more than most. You are the finest example and inspiration.

"Trooper Donaldson, VC, I salute you."

Mr Rudd said Trooper Donaldson had joined the list of Australian heroes, adding his bravery would forever be engraved in Australian history and was the "stuff of legends.".

"Generations of school children will now know of the story of Trooper Mark Donaldson," he said.

"It is a story of a hero, one which will be told in classrooms, workplaces and watering holes for many years to come."

"His feat under fire now becomes the stuff of Australian legend."

Defence force chief Angus Houston said Trooper Donaldson joined a band of brothers - only 10 VC winners are alive today - so admired for their valour.

"Victoria Cross recipients are at the very core of the ethos of which our military identity has been forged," Air Chief Marshal Houston said.

"We in the modern Australian Defence Force, strive to live up to the heroism, and the values of the Victoria Cross recipients that have gone before us."

In keeping with military protocol the air chief marshall saluted Trooper Donaldson.

"As the highest ranking member of the defence force, there has been no current serving member that I salute, until now," he said.

"Tradition holds that even the most senior officer will salute a Victoria Cross recipient as a mark of the utmost respect for their act of valour."