The Disney-backed film is being produced by Jerry Bruckheimer and directed by Joachim Ronning and Espen Sandberg. It is expected to be theatrically released in 2017.
The confirmation came Thursday from Australia's Attorney General and Minister for the Arts George Brandis, who said it would be the largest international film ever to shoot in the country.
Pre-production will start early this month with principal photography anticipated to begin in February. The film will shoot on location and at the Village Roadshow Studios on the Gold Coast.
"The Australian government is delighted to have secured the high profile fifth installment in the 'Pirates of the Caribbean' franchise to film in Australia with a contribution of A$21.6 million ($18.8 million). This is a landmark deal with Walt Disney Studios," Brandis said.
The sum had previously been promised by the Australian federal government to "20,000 Leagues Under the Sea," but that project was shelved when director David Fincher dropped out. Disney then lobbied to have the incentives switched to "Pirates."
Disney sought to have the funding promise re-allocated to the new film and topped up to a figure equal to 30% of its Australian budget.
The Brandis commitment fell short of the figure Disney was seeking, but is likely that the Queensland state government will provide further cash in order to bring the production to regional locations and studios.
"I am particularly delighted to have been able to approve this proposal, which will be Australia's largest ever contribution to the financing of a major film," said Queensland Minister for the Arts Ian Walker.
Queensland premier Campbell Newman said the film would bring in about $87.1 million to Queensland and create thousands of local jobs.
Australian craft union MEAA said in September that it had endorsed an agreement in principle for "Pirates 5."
"Queensland has an incredibly diverse landscape and Australia's robust entertainment industry and many accomplished craftsmen will provide a fantastic home base for our production," said Philip Steuer, senior VP of physical production the Walt Disney Studios.