The investment, which will be made over a period of a decade, will also be used to enhance Australia's intelligence capabilities, Efe news.
"The federal government's top priority is protecting our nation's economy, national security and sovereignty. Malicious cyber activity undermines that," Prime Minister Scott Morrison said in a statement.
"My gGovernment's record investment in our nation's cyber security will help ensure we have the tools and capabilities we need to fight back and keep Australians safe," he added.
On June 19, Morrison announced that Australia had suffered a large-scale cyber attack, allegedly backed by a foreign country.
"We know it's a sophisticated state-based cyber actor because of the scale and nature of the targeting and the tradecraft used," he said at an impromptu press conference.
Although Morrison did not name any country at the time, a few days later, the country's authorities raided the house and office of a New South Wales lawmaker for his alleged links with the Chinese government.
In the past, China has been a target of suspicion for the cyber-attack on the Australian parliament in February 2019, ahead of Australia's general election, and cyber attacks on state agencies and universities.
Amid this climate of tensions between China and Australia over suspicions of interference and espionage, Chinese Foreign Ministry spokesperson Zhao Lijian accused Canberra of inciting defections in China, spying on its students and encouraging theories in the media about Chinese espionage.
Lijian said that the charges of espionage and interference against China were not based on "solid evidence" while emphasizing that "irrefutable evidence abound to prove Australia's operation of spying activities in China", without providing further details.
The bilateral relationship has deteriorated due to issues such as a proposal by Australia for a "transparent" investigation into the origin of the novel coronavirus and the approval in Australia of laws against foreign interference and espionage after uncovering Chinese donations to political parties.
The Australian government has also blocked Chinese companies, Huawei and ZTE, from providing equipment for the country's 5G network citing security reasons, as well as from the purchase of land deemed strategic.