Prime Minister Tony Abbott on Wednesday announced Australia would make a one-off boost to its current 13,750 refugee and humanitarian intake by 12,000 permanent places over the rest of this financial year.
"This is a very significant increase in Australia's humanitarian intake and it's a generous response to the current emergency," he told reporters in Canberra on Wednesday.
Australia will also provide $44 million to support 240,000 displaced people in countries neighbouring Syria and Iraq through the UN refugee agency and other groups. The funds for humanitarian aid will come from the Department of Foreign Affairs and Trade's existing budget for emergencies and natural disasters.
The permanent resettlement places will go to those most in need - women, children and families from persecuted minorities. A senior government source said unaccompanied minors had not been ruled out, but are usually "quite complex" cases.
Mr Abbott said the one-off increase would be on top of the existing annual humanitarian intake of 13,750 places that will increase to 18,750 in three years.
"The government will shortly despatch officials to the region to begin working with the UNHCR to identify potential candidates for resettlement," he said.
A senior government source said the first people could be expected by Christmas after a series of health, security and other checks.
Mr Abbott thanked state and territory leaders and community groups for their public support.
"When we see a problem we roll up our sleeves and do what we can to help," he told parliament.
"That is the Australian way."
He denied the government was sending the wrong message to Muslims by limiting the increased refugee intake to persecuted minorities.
"Our focus is on the persecuted minorities who have been displaced and are very unlikely ever to be able to go back to their original homes."
The government is not putting a timetable on taking the additional refugees.
"We want the 12,000 to come in as quickly as possible," Mr Abbott said.
Gov Party room confirms 12,000 refugees for permanent residents over and above current number of 13,750 + $44 mill now for UNHCR @SBSNews
— Catherine McGrath (@CathMcGrath) September 9, 2015
Earlier, International aid agencies told Immigration Minister Peter Dutton during meetings in Europe vital assistance was needed to help feed, clothe and shelter refugees in camps located outside Syria's borders.
The message was reinforced back home by World Vision chief Tim Costello, who said bringing extra refugees to Australia was just "the pimple on the hippopotamus" in terms of an overall response.
Australia should give $144 million this year alone to make up its fair share of funding, he told ABC radio on Wednesday.
Diversity of views
The federal government's decision to permanently resettle 12,000 refugees from the conflict in Syria and Iraq has been welcomed by their backers in Australia.
"It is an important first step and shows to the world that Australia is willing to support those who are in great need," said Refugee Council of Australia president Phil Glendenning.
Even the Greens gave Mr Abbott the thumbs-up.
"He has made a difference to the lives of 12,000 people," Greens leader Richard Di Natale told reporters in Canberra.
Amnesty International described the pledge as a positive demonstration of leadership.
"But there's no reason this number can't be increased to 20,000 people," its Australian refugee coordinator Graham Thom said.
Oxfam said it was a bold move in the right direction while praising the government's "u-turn" on taking more refugees.
NSW Premier Mike Baird welcomed the federal government's "bold and generous decision" to resettle the refugees.
"People have united behind the simple idea that our boundless plains are here to be shared, especially with those that are in desperate need," he said.
Labor says the government must now work with the UN and International Organisation for Migration to identify people based on vulnerability and whether they had existing ties in Australia.
Government backbencher Ewen Jones, who wants Australia to accept up to 50,000 refugees, said persecuted Christians should be prioritised, but was open to listening to the advice Mr Dutton brought back.
Greens MP Adam Bandt said taking a discriminatory approach would only inflame tensions.
"If you want to know why around the world many Muslims, especially young Muslims, don't like western governments, it's because they say things like this," he said.
"Political leadership means... speaking to the good heart of the Australian people rather than trying to inflame fears."
Reverend Costello warned the only appropriate response was a non-discriminatory one.
He acknowledged Christians had been targeted by Islamic State extremists, but said they'd been protected by the Assad regime which killed large numbers of other people.
But Nationals MP Andrew Broad said the debate wasn't one about discrimination but rather the ability of people to return to Syria once the conflict was over.
"There's been no doubt that the Christian minority groups in Syria have been targeted and post the conflict there may not be much opportunity for them to be able to integrate back into Syria," he said.
Mr Broad's community was already home to many refugees, and locals "essentially want people who will fit in and who will work".
