Canberra: Australia will spend Aus$86.8 million (US$81 million) over the next three years to help Indonesia manage its asylum-seeker population, budget papers revealed Tuesday.
Canberra said the money would be used to fund regional cooperation arrangements with its neighbour.
The government will also spend Aus$3.7 million in 2014-15 for "international engagement activities to prevent and disrupt maritime people-smuggling".
"Australian Customs and Border Protection Service officials will be stationed in Indonesia, Malaysia and Sri Lanka to coordinate Commonwealth (Australian) agency efforts to sustain the prevention of maritime people-smuggling," the papers stated.
Australia will also donate two retired Bay-class vessels to Malaysia from 2015/16 to assist regional efforts to combat the people-smuggling scourge.
Canberra`s reforms to immigration policy are expected to reap economic benefits, with savings of Aus$2.5 billion projected over five years because fewer boat-people are coming.
The number of boats arriving in Australia has dried up under the government`s tough policy of turning boats back to Indonesia and denying would-be refugees resettlement in Australia by sending them to Papua New Guinea and Nauru.
No asylum-seekers have arrived by boat in Australia so far this year, allowing the government to announce that several immigration detention centres will be closed.
"This sustained successful prevention of further illegal boat arrivals will see the cost to the budget reduce by $2.5 billion this year and over forward estimates," said Immigration Minister Scott Morrison.
As already announced, a new Australian Border Force will be established by merging Customs and Immigration Department operations, funded in part through efficiency savings.
Australia`s overall migration intake will remain at 190,000 in the 2014/15 financial year, the budget said.