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.
"The 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.
Opposition Leader Bill Shorten slammed the plan via Twitter.
"Make no mistake, the only job Malcolm Turnbull cares about saving is his own," he wrote.
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 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.
