The Albanese government will spend a further $1.4 billion to deal with the impact of COVID-19, with the majority of the funding going to aged care providers.
The money will be used for continuing a range of response measures, which were due to expire on September 30 but will be extended until the end of the year.
The package includes financial support for aged care staff as well as funding for COVID-19 tests, protective equipment and medication.
More than 3000 people have died with the virus in Australian aged care facilities this year, almost triple the number of deaths that occurred in the first two years of the pandemic.
The government has been under pressure to respond to the mounting toll with more support for aged care centres.
Over $840 million from the funding will go towards the government's aged care support program.
More than $235 million will be earmarked for protective equipment, tests and other supplies from the national medical stockpile for aged care, disability care and other services.
Health Minister Mark Butler said the government had taken action to shore up the system in the wake of rampant outbreaks since the arrival of the most virulent Omicron variant.
"It is the fact that since the advent of the Omicron variant in particular, the number of aged care facility outbreaks has increased very dramatically," he told reporters.
"We've looked at this and realised we need to provide additional funds over the rest of the year to secure aged care."
Mr Butler said the funding would provide people with effective testing, medical care and treatments to protect frontline workers and community's most vulnerable people.
The measure has been welcomed by the Royal Australian College of General Practitioners, with its president saying GPs needed all the help they could get after two-and-a-half-years of COVID-19.
"Our health system is under tremendous strain and these measures will make a real difference," Adjunct Professor Karen Price said.
The announcement comes as public health experts express optimism that the pandemic may be nearing its end, with global deaths due to the virus in decline.
But Prof Price says the pandemic isn't over.
"We can't be complacent," she said.
"It's vital to keep fighting this virus and do all we can to keep vulnerable members of our community."
Last week, Australia recorded 279 COVID-related deaths and more than 40,000 new cases.
Health departments around the nation have moved to reporting cases and deaths weekly, to the ire of the Australian Medical Association.
AMA president Professor Steve Robson branded the move "a dog's breakfast".
He said reporting methods and timing not being streamlined between states and territories made it harder to see the impact of the virus' spread as restrictions roll back.
"Being able to understand when these waves are coming allows you to plan resources, staffing," Prof Robson told the ABC.
"The issue that health professionals want to understand is where cases are surging, if they're surging, by the degree to which they're surging."