Australia will build a new high commission chancery in the Solomon Islands and provide Pacific nations with an additional $325 million to respond to COVID-19 under its Pacific step-up.
The new funding - unveiled in Tuesday's federal budget - comes amid fears of a potential security pact between China and the Solomon Islands and accusations Australia has turned its back on its island neighbours.
Just over $65 million will go towards the construction and maintenance of the new chancery in Honiara.
The federal government is also resuming indexation for Australia's baseline level of Official Development Assistance of $4 billion - resulting in an additional $90 million in the next financial year.
Australian Council for International Development CEO Marc Purcell says the resumption of the indexation protected the aid fund against inflationary pressure for the first time in a decade.
"This will help keep projects on track, without needing to reduce the number of people we help due to the rising costs of goods and services," he said.
An additional $460 million in ODA will also be spent in 2022/23 for temporary measures arising from "complex and overlapping challenges we face in our strategic environment", the foreign affairs minister says.
"We are working with others to respond to global humanitarian crises including in Afghanistan and Myanmar or natural disasters in the Pacific," Marise Payne said.
A record $1.85 billion of the ODA is being sent to the Pacific this year, Minister for International Development and the Pacific Zed Seselja says.
"Australia is the Pacific's largest development partner, security partner of choice, and most importantly, we are family."
Mr Purcell says Australia needed to keep support flowing to its Pacific neighbours with recovery from COVID-19 predicted to take more than a decade.
"As Pacific nations climb out of the COVID downturn and the effects of climate change worsen, Australia's support remains vital," he said.
It would also help stabilise the region, Mr Purcell said.
"In 2018, it was reported that China was eyeing a military presence in Vanuatu which prompted the Morrison government's Pacific step-up.
"Four years later, the same issues are arising and it's critical Australia use every arm of foreign policy to develop ever-closer links."
