The announcement at the pre-COP31 event in Fiji on Wednesday will fund four projects in island nations Fiji, Papua New Guinea, Tuvalu and Kiribati, including road and communication infrastructure.
But the news comes as a report warned the funding gap for climate finance in Pacific nations could be as large as $5.7 billion a year, leaving nations struggling to adapt to the warming environment.
Climate Change Minister Chris Bowen announced Australia's program at the event, revealing Climate Infrastructure for Resilient Coastlines and Riverbanks was designed to protect against damage caused by rising sea levels and erosion.
The projects would focus on roads in Fiji and Papua New Guinea, and communication cables in Kiribati and Tuvalu.
Climate threats and natural disasters were becoming more frequent and damaging, Mr Bowen said, reinforcing the need to protect assets in small nations that were more vulnerable to harm and less able to rebuild.
"We know that this is taking an increasing proportion of the (gross domestic product) of Pacific islands, both in terms of disaster recovery and also the need to invest in resilience," he said
"Without action, climate-driven damage would sever these vital links and cut off the communities that rely on them."
The pre-COP31 event in Nadi has hosted international speakers including Timor-Leste president Jose Ramos-Horta and former New Zealand prime minister Jacinda Ardern, and will act as a precursor to the headline COP31 climate event held in Turkey in November.
The announcement comes after Fiji unveiled a $10 million contribution to the Pacific Resilience Facility, a fund designed to collect $US500 million to support climate adaptation projects in the region.
Australia has committed $100 million to the facility and Mr Albanese called on other governments, financial institutions and investors to use COP31 to back the Pacific-led climate project.
"Investing in resilience today is far better than paying the cost tomorrow – it actually saves money," he said.
"It always astonishes me that people who call themselves economic rationalists aren't terribly rational about (the) cost-benefit analysis of investments."
The call came as aid agency Caritas Australia released research into the Pacific economy that found small nations could face a much larger climate finance funding gap than expected.
The Turbulent Waters report, based on research from the International Monetary Fund, estimated the current annual gap was between $4.3 billion and $5.7 billion.
The report found climate adaptation projects alone could cost $4.7 billion, and Caritas Australia CEO Kirsten Sayers said larger nations needed to invest to prevent these countries suffering an unfair burden.
"This new research suggests the scale of that challenge is far greater than previously understood," she said.
"This COP, the message from Pacific communities is clear: climate finance must be fair, accessible and grounded in the priorities of the people it is intended to support."
