Australia will give just over US$15 million to Kiribati towards the cost of rebuilding a main road damaged by rising sea levels.
Australia's Foreign Minister, Bob Carr, who is visiting Kiribati, says fixing the road will ensure people can get to schools, health clinics and markets.
Mr Carr says Kiribati is at the front line of climate change and without help it could be uninhabitable by 2030.
Coastal erosion, rising sea levels and saltwater intrusion into drinking water are major concerns.
Senator Carr is to join the Kiribati President, Anote Tong, in presenting a statement to the UN Security Council, calling for climate change action to reduce the risk of future conflicts over scarce resources.