Malcolm Turnbull says he doesn’t want people using the scheme as a passport into Australia and he says the new visa category would comprise two streams with additional requirements - including that jobs are advertised domestically before being available to overseas applicants.
Mr Turnbull says a higher degree of English proficiency would also be required, as well as prior work experience and new criminal record checks.
In addition, the federal government has pledged to reduce the list of over 200 nominated occupations.
Mr Turnbull says the proposed changes are designed to help Australian businesses and workers.
"These new visas will ensure that Australian businesses have access to the workers from overseas they need to fill real skill gaps, but not otherwise, and that Australians - wherever possible - where vacancies are there, where job opportunities are there, Australians will be able to fill them."
The government says some 95-thousand 457 visa-holders will be able to remain in Australia under their current visa conditions.
