Skilled workers will be able to apply for permanent residency if they live and work in regional areas for three years, in a bid to lure migrants from cities.
Prime Minister Scott Morrison and Immigration Minister David Coleman outlined the new approach to immigration on Wednesday, saying population was a "key component" to Australia's economy.
"Our population has been a key component of our economic growth, equally our population, if not well managed, can retard growth," Mr Morrison said.
The government will use permanent residency as the bait to ensure skilled workers stay in regional Australia, with a 99 per cent compliance rate in an existing scheme.
According to the immigration minister, there will be 23,000 extra regional visa spots, which require skilled workers to live and work in regional Australia for three years before they can apply for permanent residency.
The employer-nominated stream of the visa will have 9000 places, while the state and territory-nominated scheme will have 14,000 spots.
"By linking the requirement that a person stays in a regional area for three years to their permanent residency, we will see a very, very high level of compliance with that requirement," Mr Coleman said.
"Because if people don't comply, they won't get permanent residency and they will not be allowed to settle in Australia."
Earlier, the prime minister defended the timing of his decision to slash migration levels by 30,000 places as part of the immigration shake up, despite it occurring days after the Christchurch terrorist attacks.
The alleged gunman from Friday's attack is accused of harbouring hate against Muslim immigrants, but Prime Minister Scott Morrison said it's disappointing the incident has been linked to his migration cut.
"This is about managing populations, it's about infrastructure investments, it's about congestion-busting on our roads," Mr Morrison told Seven's Sunrise on Wednesday.
"It's about having social cohesion programs ... which is more about bringing Australians together."
The nation's annual migration intake is being slashed by 30,000 places in an attempt to ease population pressures on congested capitals.
