Australia spending $136 million to build new undersea data cables to Papua New Guinea and the Solomon Islands is a practical form of foreign aid, Malcolm Turnbull says.
Telecommunications company Vocus will build the Coral Sea cable system, which Australia is funding after concerns over Chinese firm Huawei's involvement in the project.
"We spend billions of dollars a year on foreign aid and this is a very practical way of investing in the future economic growth of our neighbours in the Pacific," the prime minister told an event in Queensland on Wednesday.
Mr Turnbull will sign the deal with his PNG and Solomon Islands counterparts in Brisbane on Wednesday, with the project due to be completed by the end of 2019.
The federal government stepped in to fund the cables after concerns about giving Huawei access to Australia's mainline communications backbone.
The Chinese firm has rejected suggestions it poses a security threat.