Avocados are not deep rooting trees, so the circular edging you made may
have cut half its roots off, and half its nutrient/water uptake capacity.
They really should be left undisturbed under the tree. But since you said
it was well established at least four years ago it is highly likely that it
has phytophthora (a soil fungus), a major problem of mature avocado trees in
Australia. Have a bit of a dig--if the roots have a distinct reddish look
about them, then phytophtora is the answer, and it will die.

If you decide to replace it, try to get a tree on a phytophtora-resistant
rootstock, such as Reed or Velvick.