Prime Minister John Howard said the Australian Defence Force (ADF) personnel will be sent to Afghanistan in late July for a two-year mission.
"It will be part of a Netherlands-led provincial reconstruction team, the ADF contribution will be a mixed security and reconstruction task force," Mr Howard told reporters.
The announcement comes a month after the government said it would send an extra 110 troops and two helicopters to Afghanistan, where coalition forces are fighting a Taliban resurgence.
Mr Howard said he has received assurances the troop commitment would not stretch ADF capabilities.
"We are confident that, based on the advice that we have received, that it can be carried out without imposing an unreasonable or unfair strain on the ADF," he said.
The troops would go to Afghanistan with specific objectives and would not intervene in domestic matters such as the problem of the cultivation and selling of opium, Mr Howard said.
"Dealing with that is overwhelmingly the responsibility of the local authorities," he said.
"These additional forces will go there with particular targets in mind. They will go to a particular province, they will be part of a Dutch-led reconstruction force and will act in accordance with their mission objectives."
The government of the Netherlands earlier this month committed to sending a deployment of up to 1,400 troops to southern Afghanistan to help the reconstruction effort.
Mr Howard said the Australian contingent will be a mixture of security and reconstruction personnel.