A special envoy will address rising levels of anti-Semitism in the community as the prime minister stresses the need for party unity over the Middle East conflict.
Prominent businesswoman Jillian Segal will take on the new role and meet with the federal government and Jewish community to address the issue.
Anthony Albanese said anti-Semitism directed towards Australia's Jewish community had been more prominent since October 7 attacks in Israel by Hamas militants.
A special envoy on Islamophobia will also be appointed in the short term, the prime minister said, stressing the need to strengthen social cohesion in Australia as the Middle East conflict continues.
"Australians overwhelmingly do not want conflict brought here. What they want here is harmony and for people to be able to get on with each other," Mr Albanese told reporters in Sydney on Tuesday.
"It has been a reminder over recent months that we just can't take that respect and social cohesion for granted.
"We need to nourish it. We need to cherish it. We need to celebrate it."
Ms Segal, who has served in the public and private sector as well as president of the Executive Council of Australian Jewry, will be in the role for the next three years.
She said anti-Semitism had presented threats not just to Jewish Australians but to the entire population.
"Anti-Semitism erodes all that is good and healthy in a society," she said.
"It has the capacity to lie dormant through good times and then, in times of crisis like pandemic, which we've experienced, economic downturn, war - it awakens, it triggers the very worst instincts in an individual."
Mr Albanese maintained the government was united behind calls for a two-state solution in the Middle East, after West Australian senator Fatima Payman quit Labor on Thursday over her stance on Palestine.
"We have in the Labor Party a collective responsibility ... our 103 members of our caucus are on exactly the same page on these issues," he said.
"It's a position of principle, and for those who advocate a one-state solution ... in my view, counterproductive to the interests of both Israelis and Palestinians."
Senator Payman quit Labor to go to the crossbench and had argued the government was not moving fast enough in its recognition of Palestinian statehood.
Tensions had heightened in communities following the Hamas attack, which resulted in the deaths of 1200 Israelis and the taking of hostages.
Health officials in the Middle East have said 37,000 people have been killed in Gaza since Israel declared war on Hamas.
Acting Opposition Leader Sussan Ley said the coalition welcomed the move to appoint an envoy.
"This appointment is acceptance by the Albanese government that anti-Semitism is a real and present threat in communities across Australia," she said.
The opposition used the appointment to reiterate calls for a judicial inquiry into anti-Semitism on university campuses, but the prime minister ruled out such a move.
Independent MP Zoe Daniel also praised the move.
"Australia's proud record of multiculturalism is being tested as never before. The conflict in Israel and Gaza is no excuse for anti-Semitism," she said.
But the Jewish Council of Australia's executive office Sarah Schwartz said she was concerned the envoy role would undermine efforts to stop racism.
"We are concerned that an anti-Semitism envoy in Australia ... will increase racism and division by pitting Jewish communities against Palestinian, Muslim and other racialised communities," she said.
