Australia will spend an extra $A500 million on foreign aid in the coming financial year.
Most of the money will go to Pacific nations, Indonesia and Papua New Guinea.
In February, Opposition Leader Tony Abbott proposed deferring a $400 million program to build schools in Indonesia, but the federal budget on Tuesday confirmed the programme will stay in place.
The budget also includes an extra $A124.5 million to improve education in the Pacific by training teachers, updating subjects and reducing the cost of schooling.
Funding of $A433 million has been included to improve water and hygiene.
The ABC reports the extra funding means foreign aid spending now accounts for 0.35% of Australia's gross national income.
Foreign Minister Kevin Rudd says Australia is on track to increase foreign aid spending to 0.5% by 2015-16.
