Early childhood educators and childcare workers have been recognised for their work after years of being underpaid and undervalued.
More than 200,000 childcare workers will receive a 15 per cent wage increase over two years, after the pay bump passed parliament late on Tuesday night.
This means those on the award rate will take home an extra $155 every week by the end of 2025, which was a first step towards ensuring the sector's workers are fairly compensated for their work.
"This is what our early educators do: it's not baby sitting, it's early education.," Education Minister Jason Clare told reporters in Canberra on Wednesday.
"It's not about changing nappies, it's about changing lives."
To ensure costs are not passed onto parents, the federal government will cover the price of the pay bump for childcare providers that agree to limit fee increases.
The law has been broadly welcomed with Jay Weatherill, the Minderoo Foundation's lead on its universal childcare campaign, noting it was an important first step.
"Educators are the backbone of the early childhood education and care sector," he said.
"Australia's children and families will also benefit from this reform by getting the best start to life from a high-quality early education delivered by early educators whose value to our nation is truly recognised.
The Greens have argued the measure is "woefully inadequate" and say Labor should have increased wages by 25 per cent.
"This is not a pay rise; this is a two-year pay bump," Greens senator Steph Hodgins-May said.
"We can't fix our childcare system with half-hearted measures."
The laws are part of the federal government's efforts to tackle workforce shortages in the early childhood education sector.
About 21,000 more qualified professionals are required to address the current shortfall, and another 18,000 are needed to meet future demand, according to Jobs and Skills Australia.
