Australian officials are visiting Vanuatu this week to discuss aid strategies.
The department of foreign affairs says this follows what it calls Vanuatu's renewed commitment to the principles of good governance and economic reform.
Canberra last year warned Vanuatu it would cut off all bilateral aid if the government of Serge Vohor made good on threats to throw out two Australian police advisers.
Australia says it's now working closely with the Vanuatu government on an aid strategy for the next five years.
The department of foreign affairs says it'll provide more than US$850,000 to help Vanuatu's urban youth find employment.
It also hopes to raise awareness of health issues, including HIV/Aids, amongst youth living in slum settlements.