Immigration Minister Tony Burke revealed the long-awaited changes on Thursday in a speech to the National Press Club, following weeks of delay and speculation.
He began his speech urging people not to lose sight of migration as "fundamentally a strength to Australia", while acknowledging genuine problems to be confronted.
The suite of policy changes, which does not include new legislation after negotiations with the coalition broke down, will also include a ballot system with limits for working holiday maker visas and restricting foreign students from bringing family members to Australia.
A central component is the reintroduction of the pre-2015 system which Mr Burke said will re-incentivise overstayers to leave or face being locked up in a detention centre.
"We need, with the integrity of the program, to make sure that we can go back simply to what we did before 2015, no more and no less," he said.
The changes are expected to bring net overseas migration from 292,100 to meet budget forecasts of 245,000 in 2026/27 and 225,000 each year thereafter.
Mr Burke made a concerted effort to dismiss arguments including blaming the housing crisis on immigration, which the minister said has been fuelled by fewer people living in each house over the decades.
The average number of people per household has dropped from 2.9 to 2.5 since Bob Hawke was prime minister in the 1980s, while the increase in the total number of homes in Australia had outpaced the nation's population growth over the same period by 25 per cent, Mr Burke said.
"Every time we get a (0.1 per cent) change in the number of people per household, we have to find an additional 450,000 homes," he said.
International students won't be able to transfer to a lower qualification to stay in the country to combat visa hopping.
Rogue migration agents who knowingly supported visa applications without merit, will be sanctioned and deregistered.
The skilled migration program will be tweaked to prioritise applicants in healthcare, construction, education, law enforcement, defence, resources, agriculture, aquaculture, and fishing.
Tourists will be prevented from extending their stays in Australia with the introduction of a ''no further stay'' condition on visitor visas.
Working holiday maker visas, which the agriculture and tourism industries heavily rely on for staff, will see a ballot system introduced for years two and three, limited to 45,000 and 5000 respectively.
The current freeze on processing of working holiday visas will come to an end, with processing times for applications to be stabilised at three months.
The department will also be handed greater powers to cancel visas for migrants involved in crimes targeting children, domestic violence and hate crimes.
It's the immigration minister's second run at announcing migration changes, six weeks after canning his first due to cabinet disagreements over the extent of the shake-up.
One Nation released its migration plan on Monday, which would cut three-quarters of a million migrants over three years and impose even more strict restrictions on international students, family visas, along with promises of widespread deportations.
The coalition wants to slash net overseas migration in line with new housing construction, but negotiations between the parties on a broader legislative package broke down.
Opposition Leader Angus Taylor said the coalition's policy would be revealed in due course, blasting the government for losing control of migration numbers.
The Australian Bureau of Statistics revealed net overseas migration fell from about 299,000 in 2025 to 292,100 in the year to March in a population update released one hour before Mr Burke's scheduled address.
Australia's total population grew by 1.4 per cent in cent in the 12 months to March to 27.9 million.
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