Malcolm Turnbull has announced he is abolishing the 457 visa program for skilled migrants.
The prime minister said Australia was a successful multicultural "immigration nation" but it was time to put Australians first.
"Australia is the most successful multicultural nation in the world, we are an immigration nation, but he fact remains Australian workers must have priority for Australian jobs," he said in a video posted to Facebook on Tuesday.
"We will no longer allow 457 visas to be passports to jobs that could and should go to Australians."
Mr Turnbull said it remained critical to give businesses access to skilled staff.
"The 457 visa will be replaced by a new temporary visa specifically designed to recruit the best and the brightest in the national interest," he said.
"The new visa will better target genuine skills shortages, including in regional Australia."
The new visa program will include requirements around work experience, English language proficiency and labour market testing.
The Prime Minister also announced plans to roll out a new training fund.
Opposition Leader Bill Shorten slammed the plan via Twitter.
And One Nation leader Pauline Hanson took some credit for the policy change.
"The government will deny their tough talk on immigration and plan to ban 457 visas is because of One Nation but we all know the truth!" the senator tweeted.
Mr Turnbull later told reporters in Canberra Mr Shorten, as employment minister in a Labor government, was the gold medal winner of issuing 457 visas.
"The fact is that Bill Shorten likes to talk about Australian jobs, but whenever he's had the opportunity in government to protect them, he's failed them."
What is going to change?
Under the government's plan the list of occupations that qualify for a temporary visa will be reduced from its current number of more than 200.
The visas will be limited to a two-year period that require previous work experience.
A second four-year visa will require a higher standard of English language skills as well as a proper criminal check.
No impact on current visa holders
The new system would be "manifestly, rigorously, resolutely" conducted in the national interest to put Australian jobs first, Mr Turnbull said.
Immigration Minister Peter Dutton said the new two-year visa would not allow permanent residency.
Anyone now in Australia on a 457 visa will not be affected by the new arrangements.
"They will continue under the conditions of that visa," Mr Dutton said.
