Australian universities will be required to work with security agencies to ensure they guard against undue foreign interference, Minister for Education Dan Tehan said on Wednesday.
Foreign students are worth about A$35 billion ($23.64 billion) a year to the Australian economy, with Chinese students accounting for about a third of that figure.
But after a spate of cyberattacks and fears that China could influence research and students, Tehan said a task-force of university representatives and security agencies would be set up.
"Universities are an attractive target given their research across a range of fields and the intellectual property this research generates," Tehan said in a speech in Canberra. The task-force would ensure universities had sufficient cyber defenses, he said.
In June, the Australian National University said hackers had in 2018 breached its cyber defenses to obtain sensitive data, including students' bank account numbers and passport details, going back 19 years.
Australia has not identified the culprits behind that attack.
The task-force would also ensure academic research and students are free from any undue influence, Tehan said.
This month, Australia's most populous state said it was scrapping a Chinese-funded education program that teaches Mandarin in several university amid fears of foreign influence. Asked about the steps, Chinese foreign ministry spokesman Geng Shuang said it was nonsense to suggest China was seeking to infiltrate Australia.
"Politicizing cooperation in education and artificially putting up barriers is not good for either side and does not enjoy popular support," he told a daily news briefing.
"We hope the Australian side can objectively view China-Australia cooperation in all areas, cherish the fruits of bilateral cooperation and do more to benefit Sino-Australia friendship and mutual trust."
Relations between Australia and China have been strained in recent years over Australian fears of Chinese activity, both in Australia and the Pacific region.
In 2017, then prime minister Malcolm Turnbull accused China of meddling in domestic affairs. China denied it.
Tension between the two countries was exacerbated again this week with confirmation of the arrest in China of a Chinese-born Australian writer on suspicion of espionage.
