CAEs were designed to complement universities, forming a binary system modelled on that of the United Kingdom. This system was created by the Menzies government on the advice of the Committee on the Future of Tertiary Education in Australia, chaired by Sir Leslie Martin.
The initial intention was for CAEs not to issue degrees, instead offering lesser awards. However in the first year of the sector's establishment, the Victorian College of Pharmacy was permitted to issue a degree by the Victorian government, and its Commonwealth funding was not cut off for breaking the rules. Many other degree courses followed, and the policy was reviewed.
Until 1974, the sector mainly comprised technical, agricultural and specialist paramedical colleges. In that year, the state government controlled Teachers College systems became CAEs, leading to teaching students' comprising half of all students in the sector.
The colleges were known by a number of different titles:
This sector ceased to exist when the Hawke-Keating government implemented the reforms associated with the Dawkins Revolution. The states, eager for increased education funding, merged CAEs either with existing universities or with each other to form new universities. Details of these mergers are available in an AVCC report, see External links below.
In each state, the most prestigious university that was founded on the basis of an Institute of Technology became a founding member of the Australian Technology Network.