Paul Fletcher, the minister for Communications, unveiled the Online Safety Act in a speech to the National Press Club on Wednesday, urging technology giants such as Google and Facebook to "step up" in tackling the dangers of the internet.
If passed by the Parliament, the act would force technology companies to remove harmful content from their platforms within 24 hours, down from the current 48 hours. It would also increase protections against cyber-bullying and make it harder to find harmful content via search engines.
"Harmful material must be taken down faster. Attempts to send terrorist attacks viral must be stopped in their tracks," Fletcher said.
"Industry needs to step up and take more responsibility. We need smart new approaches to getting harmful content down when fringe gore sites want it glorified.
The minister said this act will "put pressure" on the industry to prevent online harms and will introduce important new protections for the Australians.
Prime Minister Scott Morrison led the charge on a global crackdown on harmful content online after New Zealand's Christchurch mosque shootings in March were live streamed on Facebook and shared millions of times.
In June he secured a agreement from world leaders attending the G20 summit in Japan, which he described at the time as "an unprecedented co-ordinated effort and show of unity in the fight against terrorist and violent extremist content shared online."
Fletcher on Wednesday criticized the technology sector for being "very resistant" to further regulation.
"We need to get to a point where our online highways benefit from the same rigorous approach to safety we see in the global automotive market where international standards, enforced by legislation made by sovereign nations, are met by global manufacturers as they supply their vehicles to global markets," he said.