Bank of Uganda has recalled all the 1987 series sh1,000, sh5,000, sh10,000, sh20,000 and sh50,000 bank notes printed before the year 2010.
The bank notes will, however, still be considered for transactions until March 30 next year.
Also being phased out is the sh10,000 bank note unveiled in 2007 to commemorate the Commonwealth Heads of Governments Meeting held in Kampala.
"Bank of Uganda informs the public that in exercise of the powers conferred upon it by Section 23 (3) of the BoU Act, the 1987 series bank notes will cease to be legal tender on March 30, 2013," the deputy governor, Dr. Louis Kasekende, disclosed yesterday.
He said BoU had directed all commercial banks to stop issuing the 1987 series bank notes to their customers.
"We had discussions with all commercial banks and sent out a circular, asking them to stop issuing the bank notes with immediate effect," Kasekende said.
Bank of Uganda introduced new bank notes in May 2010. These notes have since been in use alongside the 1987 series bank ones.
Of the estimated 2.4 trillion bank notes in circulation, the old notes constitute 4% (about sh93b), showing a significant reduction in their supply, Kasekende explained.
He maintained that the seven-month period given for the recall of the old notes was adequate to wipe them out of circulation and appealed to the public not to panic.
"The public may continue to transact normally using the 1987 series bank notes already in circulation up to March 30, 2013. Thereafter, the bank notes will not be acceptable for transactions," he said.
Beyond the March 30 deadline, the public will only be able to exchange their 1987 series bank notes at the Bank of Uganda offices in Kampala, Jinja, Mbale, Gulu, Mbarara, Arua, Kabale, Masaka and Fort Portal.
This will only be allowed up to December 31, 2013.