Auris, Prius and Prius+ hybrid cars with the 1.8-litre engine, built between October 2008 and November 2014, are affected.
The automaker said there have been three cases in which vehicles became immobile, but there have been no accidents due to the system fault.
The company says the issue differs from problems with the Prius fail-safe mode that were addressed in the 2014 and 2015 recalls.More news: Ruby Rose is internet's most 'dangerous' celebrity!
When asked if any crashes had been reported because of the issue, Toyota offered no comment. It's thought that vehicles sold in China, Africa, Oceania and other regions are also affected by the recall.
"While power steering and braking would remain operational, a vehicle stall while driving at higher speeds could increase the risk of a crash". The problem would be fixed by means of a software upgrade that would take about 40 minutes, he said.
The fail-safe driving mode, also known as "limp mode", is engaged when the auto computer detects a critical issue with the vehicle, which usually means receiving signal values way outside of the normal range from one or more of the built-in sensors.
A failsafe mode created to engage in the event of a hybrid system fault may not kick in because of a software glitch, causing the vehicle to stall, according to a company statement.More news: FBI Makes 'Ricin Case' Arrest After Man Sends Castor Seeds To Pentagon
"If this occurs, the vehicle could lose power and stall".
Toyota Australia said it would contact all affected auto owners to advise them to book into a Toyota dealer to have the software fixed free of charge.
The auto giant last month issued a recall for 1.03 million cars globally over an issue related to wiring that could cause fires in vehicles.More news: Pompeo to Visit Beijing amid Increasing US-China Military Tensions