Australia has pledged $165 million to a United Nations fund that helps poorer nations combat climate change.
One of the world's worst polluters per capita, Australia has been under international pressure to donate to the U.N. Green Climate Fund.
Prime Minister Tony Abbott has been reluctant to do so, saying his government was taking its own steps to improve the environment.
Talking to reporters in Melbourne he was asked if the contribution was "another backflip."
“I've made various comments some time ago but as we've seen things develop over the last few months I think it's fair and reasonable for the government to make a modest, prudent and proportionate commitment to this climate mitigation fund. I think that's something that a sensible government does,” Abbott said.
The money for Australia's contribution to the fund will be allocated from its aid budget, Abbott said, and was to be officially announced later Wednesday by Foreign Minister Julie Bishop at the U.N. Climate Change Conference in Lima, Peru.
The GCF is a major part of a plan agreed in 2009 to raise $100 billion a year by 2020 from public and private sources to help developing nations tackle climate change.
It aims to help emerging economies curb their greenhouse gas emissions and adapt to changes such as heat waves, mudslides and rising sea levels, and is seen as vital to unlock a U.N. climate deal meant to be agreed in late 2015 in Paris.
The conservative leader has a record of criticizing global efforts to combat climate change, and has said world leaders are exaggerating the threat.
After coming to power last year, he immediately repealed a tax that forced Australia's biggest polluters to pay a fine for each ton of carbon they emitted.
Australia's reliance on coal for electricity and its mining exports make it the worst per capita polluter of any Western nation.
G20 leaders put an uncomfortable spotlight on climate change at last month's leader's summit in Brisbane, despite efforts by host Australia to focus more narrowly on economic growth.
Japan pledged $1.5 billion to the fund during the summit and President Barack Obama pledged up to $3 billion, putting the fund within sight of its $10 billion goal.
In November, the United States and China set goals for curbing climate change, brightening prospects for Paris even though their promises, including Beijing's plan for an undefined peak in greenhouse gas emissions by around 2030, were vague.
The policy reversal follows Abbott's decision December 9 to abandon a plan to radically reshape Australia's universal healthcare system by charging patients a fee to see their doctors.
Some material for this report came from Reuters.