Anthony Albanese says a public holiday for a national day of mourning is the appropriate response for the country to come together following the death of the Queen.
It comes as the prime minister announced MPs and senators would speak on a condolence motion in federal parliament later this month for the late monarch.
Parliament was due to meet this week but was suspended in the wake of the Queen's death.
Instead, September 23 - the day after the one-off national holiday - has been set aside for MPs and senators to pay tribute, led by the prime minister and Opposition Leader Peter Dutton.
"This is a time for unity of Australia as a nation, a time where we are grieving and acknowledging the contribution of Queen Elizabeth II as our head of state for 70 years," Mr Albanese told reporters in Canberra on Monday.
"A one-off public holiday and a national day of mourning is an appropriate response that was agreed to by myself and the premiers and chief ministers."
Asked about anecdotal evidence of low crowd numbers, the prime minister said there had been large crowds not just in Canberra but across the country to witness proclamation ceremonies for the new monarch, as well as other events.
Finance Minister and former ACT chief minister Katy Gallagher said she had been inundated with tributes from Canberrans following the death of the Queen.
As chief minister, Senator Gallagher met the Queen during her last visit to Canberra.
"Canberrans feel very proud of the fact she thought here was her home away from home so I think ... Canberrans have responded in line with the rest of Australia," she said.
The day of mourning on September 22 will include a national memorial service at Parliament House.
Asked why the British parliament could meet but the Australian parliament had been postponed, Mr Albanese said the arrangements had been in place "for a long period of time".
Independent MP Allegra Spender - whose Wentworth electorate vastly supported becoming a republic at the 1999 referendum - said the community still wanted to recognise the Queen's life and service.
Indigenous people who were concerned about the monarch's representation of colonisation should also be respected, she said.
"Most people just want to celebrate the life of Queen Elizabeth with respect," she told Sky News.
"Then (we'll) consider down the track what this means for Australia's own constitution, the recognition of Aboriginal and Torres Strait Islander people and (the) question of being a republic."
A three-day parliament session to deal with urgent legislation has been scheduled for September 26 to 28.
The prime minister and Governor-General David Hurley will fly out of Australia to the UK on Thursday for the state funeral, which will be held next Monday.
Logistics are being worked out for Australia to help with transport for representatives from 10 Pacific island nations to attend the funeral.
Meanwhile, Australia's acting high commissioner to the United Kingdom Lynette Wood has met with King Charles III and the Queen Consort to convey the nation's condolences to their majesties.
The King's warmth for Australia was evident during her conversation with him, she said.
The diplomat was the first Australian official to formally meet the new King.
Victoria has also proclaimed the King as Australia's new head of state on Monday.
Victoria's Lieutenant-Governor, Chief Justice and other senior officers swore oaths to the King in a proclamation ceremony at Government House.
All states except Victoria held their own proclamation ceremonies on Sunday.