The plan has been announced by the Parliamentary Secretary to the Minister for Foreign Affairs, Teresa Gambaro.
In 2006 and 2007, over A$100 million will be spent to support education in the region.
And a further A$100 million will be allocated to the Australia-Indonesia partnership for Reconstruction and Development.
Ms Gambaro says this initiative extends education assistance across the country, including areas devastated by the tsunami.
Ms Gambaro says last year's aid program in the region allowed the upgrade of over 40,000 school facilities and provided more then 200,000 teachers with class material.