The Reserve Bank of India (RBI) has extended the date to exchange pre-2005 bank notes from 31 December, 2015, to 30 June, 2016.
However, from 1 January, 2016, such facility will be available only at identified bank branches and issue offices of the RBI.
In December 2014, the RBI had extended the date to 30 June, 2015.
It is standard international practice to not have currency notes from multiple series in simultaneous circulation, said the central bank.
The Reserve Bank has also clarified that all such notes continue to be legal tender.
The RBI said banknotes in the Mahatma Gandhi series have now been in circulation for a decade, and most of the the old banknotes have been withdrawn through bank branches.
It has, therefore, been decided to withdraw the remaining old design notes from circulation.
The RBI will continue to monitor and review the process of exchanging pre-2005 bank notes to avoid inconvenience to the public, said the bank in a statement.
The periodical phasing away of old notes and replacing them with new series is to check the circulation of fake currency notes and keep a tab on black money.