The government will scrap the controversial 457 visa and replace it with a new "temporary visa" with additional provisions for English proficiency.
“We are abolishing the 457 visas – the visas that bring temporary foreign workers into our country," Prime Minister Malcolm Turnbull said in a video Facebook post.
The 457 visa allows businesses to bring skilled foreign workers into Australia to fill shortages in the labour force.
=== What the 457 visa changes mean for workers ===
Turnbull government will abolish the 457 working visa
A new temporary work visa to be introduced
New visa to assess English skills, work history, police checks and skills shortages
Those currently on 457 working visa will be allowed to stay in Australia
Australians to get preference for jobs first
But in the video announcement posted on the prime minister's Facebook page, Mr Turnbull said his government would be putting "Australians first".
"We are an immigration nation, but the fact remains: Australian workers must have priority for Australian jobs," he said.
"We'll no longer allow 457 visas to be passports to jobs that could and should go to Australians."
In a nod to business, Mr Turnbull said the 457 visa would be replaced by a new visa that would allow the "best and the brightest" of foreign workers.
Those already in Australia on a 457 visa would be grandfathered and allowed to serve out their contracts.
The new visa would take into account English skills and an applicant's work history, Mr Turnbull said.
It will also be used to target skills shortages in regional Australia.
Mr Turnbull also announced there would be a new fund to address skills shortage within Australia's current workforce, with details to be announced later.
Never a fan of the 457 visa in the first place, unions had renewed calls for them to be scrapped after several fast-food outlets were found to be employing foreign workers ahead of young Australians.
The Turnbull government moved quickly in March to remove the fast-food industry entirely from the 457 visa application provision but unions wanted the bans to be more widespread.
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.
- With AAP