250 Australian police are to be sent to four locations in Papua New Guinea in a five year operation to restore order to the country's hotspots.
The operation will be double the size of Australia's intervention in Solomon Islands.
The two governments are expected to formalise the agreement in Adelaide next week, according to today's edition of the Australian paper, The Age.
It reports that the police will be sent to Bougainville, Port Moresby, Mount Hagen and Lae.
The PNG police minister, Bire Kimisopa, says the most urgent deployment is to Bougainville where peace monitors are scheduled to depart early next year.
The Australian foreign minister, Alexander Downer, had said earlier this year that there could be little funding above the 253 million U.S. dollar annual aid programme.
But, the federal cabinet has now agreed to provide more than 72 million US dollars extra a year to PNG after fears it could collapse if action wasn't taken.
The agreement comes after a tough new budget was tabled in PNG which looked as if it would stall the recruitment of police despite the rising crime problem.
And, it also follows news that the PNG government has delegated police powers to Bougainville, to give practical effect to the Bougainville peace agreement.
Australia is also reported to be demanding that PNG's public sector be reduced by two-thirds from its current 75,000 strong workforce.
