The internet shouldn't be under the management of the state but it essentially cannot be ungoverned, the federal government says.
A new international digital strategy launched on Wednesday aims to address how Australia will extend its influence in the Indo-Pacific region and try to balance booming trade and increasing threats in the digital space.
"The borderless nature of cyberspace presents us with as many challenges as it does opportunities," Foreign Minister Julie Bishop said in Sydney.
"While we champion an open, free and secure internet, I believe it is important for the security of our nation and the security of all Australians that cyberspace is not an ungoverned space."
The paper, backed by $10 million of funding, aims to improve nations' behaviour in cyberspace.
That includes supporting "proportionate" counteraction taken by victims of another country's malicious cyber activity.
On a criminal level, Australia has promised to train judges, prosecutors and police in the Indo-Pacific region to boost those countries' capability to investigate cybercrime.
Preventing "undue restrictions of human rights online" is also an aim outlined in the strategy.
Ms Bishop said the strategy puts Australia at the forefront of international efforts to promote and protect a peaceful and stable online environment.
"I'm pleased that Australia has taken this very bold step of leading the way in setting out how we intend to engage across the cyberspace," she said.
The eight-chapter paper also notes the private sector's role in facilitating technological change.
