The Australian government said it plans to raise its annual intake of refugees to 20,000 people annually in a bid to thwart the activities of human smugglers.
In a measure of goodwill, Australia will immediately resettle 400 asylum-seekers from Indonesia.
"We will be increasing our annual refugee intake from 13,750 to 20,000 places in this financial year," said Australian Prime Minister Julia Gillard in a statement.
"This is a more than 40 percent increase to our humanitarian intake and the biggest boost to Australia's refugee intake in 30 years."
The Canberra government hopes that the measures will prevent people from making the risky sea voyage to Australia from Indonesia -- a journey that has led to hundreds of deaths in the past year alone.
"This increase [in refugees legally permitted to settle in Australia] shows that people can pursue regular options and be safely referred to resettlement countries such as Australia as part of an orderly humanitarian program,” Gillard added.
“Taking a dangerous boat journey is no advantage."