Prime Minister Julia Gillard has identified cyber attacks as one of the key threats to Australia.
In a speech on Wednesday, she promised to create a cyber security centre by the end of the year.
"It will provide Australia with an expanded and more agile response capability to deal with all cyber issues - be they related to government or industry, crime or security," Ms Gillard said in Canberra.
"Importantly it will also create a hub for greater collaboration with the private sector, state and territory governments and international partners to combat the full breadth of cyber threats.
"Malicious cyber activity will likely be with us for many decades to come, so we must be prepared for a long, persistent fight."
The ABC reports Ms Gillard also spoke of the need to ensure security spending is well targeted.
She said Australia's long-term security interests are strongly linked to continuing stability and peace in Asia.
