The settlement, complete with its own school, developed near Warwick, in Queensland, when authorities imposed a state-wide lockdown on horses.
About 250 horses had been at Morgan Park equestrian centre competing in an event. About 120 people opted to stay on to care for their animals.
An animal unknowingly infected with the disease in New South Wales had travelled to the event, and the virus swept through the horse population.
Authorities offered their formal thanks to horse owners for their efforts in helping to contain the flu outbreak.
However, the end to Morgantown will not be a free-for-all. People will be leaving over several days. Those departing will be issued with travel permits with strict conditions, and state authorities will oversee the decontamination of vehicles and equipment as each horse leaves Morgan Park.
Meanwhile, the vaccination programme is well under way across New South Wales, Queensland and Victoria. Veterinarians have been inoculating horses in buffer zones around areas of infection, and in NSW some 3000 racehorses have been vaccinated - at Rosehill, Newcastle, Gosford, Kembla Grange and Wyong.
Veterinarians had begun vaccinating horses in NSW under the containment strategy on the central and south coasts, as well as in the southern highlands and Hunter Valley.
The first shipment of 20,000 doses arrived late last week and are being used tactically for containment, and to protect horses scheduled to compete in the Victorian spring racing carnival.
A further 130,000 doses - the entire world stock of the correct vaccine - are due in Australia on Friday.
About 100 doses have been allocated for the vaccination of horses shortlisted for Olympic competition in Beijing.
Equine Federation of Australia's NSW veterinary advisor Derek Major said immediate vaccination was the first step on a long road to Olympic competition.
"Although Olympic horses are not due in Hong Kong until next August, we are working back on a tight timeline to make sure they will be competitive," he said. "They must demonstrate they are fit, competitive and experienced to an elite level to achieve Olympic selection.
"Selected horses will also have to be free from this disease in time for some to travel to New Zealand and Europe for further lead-up competition."
NSW deputy chief veterinary officer Steve Dunn said vaccination would minimise the clinical signs of the disease in any horses that became infected. "Vaccine has been allocated so these horses have enough time to get back to full training and compete at an elite level in lead-up events."
It is understood a plan has been formulated for some of the horses to be airlifted to Britain for pre-Olympic competition if the flu crisis worsens.
In other news: