Nestlé said the decision was made “due to overtones which are out of step with the company’s values.”
The names of the products have prompted complaints for several years. Redskin is a slur used to describe Native Americans, while Chico can be a derogatory term for Latin Americans.
“Nestlé has an unwavering commitment to upholding respect for our friends, neighbours and colleagues,” said Chris O’Donnell, general manager of confectionery at Nestlé.
“We hope Australians will support the evolution of these two much loved lollies — while the names are new, the lollies themselves remain unchanged.”
The rebranded candies will go on sale early next year, the press release said.
“We will keep pack changes simple to help lolly lovers find their favourites easily,” added O’Donnell.
Nestlé announced in June that it would be renaming the products. “This decision acknowledges the need to ensure that nothing we do marginalises our friends, neighbours and colleagues,” the company said at the time.
Nestlé is also renaming its Beso de Negra marshmallow treats, which are sold in Colombia. The name translates as “kiss from a Black woman.”
In June, Nestlé said it was carrying out a “full review” of its portfolio of more than 2,000 brands and 25,000 products. “This will identify any required changes to our use of imagery or language,” the company said.
The changes were prompted by conversations about racism in society, culture and marketing, following a wave of protests around the world at the killing of George Floyd.
CNN’s Rob Picheta contributed to this report.