A $2 billion Pacific infrastructure fund is Scott Morrison's centrepiece of a new push to make the island nations the main priority of Australia's foreign policy.
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Defence links will also be beefed up, with more training of Pacific militaries and regular navy deployments.
"My government is returning the Pacific to where it should be - front and centre of Australia's strategic outlook, foreign policy and personal connections, including at the highest levels of government," Mr Morrison in a speech in Townsville on Thursday.
"This is our patch. This is our part of the world."
China has increasingly moved into the region with loans for infrastructure, but Mr Morrison wants Australia to be the first port of call for Pacific nations.
He announced the creation of an Australian Infrastructure Financing Facility for the Pacific to develop energy, communications and transport projects.
"This $2 billion infrastructure initiative will significantly boost Australia's support for infrastructure development in Pacific countries and Timor Leste," he said.
Grants and long-term loans will be made available.
A further $1 billion will go to Efic, Australia's export financing agency, to support Australian businesses active in the Pacific.
"We announced Monday week ago we'd set up a Pacific infrastructure bank," Labor leader Bill Shorten told reporters.
"Imitation is the sincerest form of flattery - great."
Australian Council for International Development chief executive Marc Purcell warned the fund must not add to the Pacific's problems.
"There are already a significant number of lenders to the Pacific, and many Pacific nations are already suffering from debt distress," Mr Purcell said.
Mr Morrison announced Australian navy vessels will be deployed to the Pacific for training and exercises with the new Guardian patrol boats Australia is giving to island nations.
Defence, police and border security chiefs will also be invited to annual meetings.
Free TV Australia has started working with the government on getting more Australian TV content into the Pacific, but the Greens say the ABC should be doing the job.
Australia's diplomatic network is already larger than any other country in the Pacific, but Mr Morrison said it will be expanded with posts in Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands.
A new sports pathway program will also provide stronger sporting links between Pacific nations and Australia.
Mr Morrison will host a barbecue for Pacific leaders at the APEC conference in Port Moresby next weekend.
Australian Associated Press
