A total of $7.5 million will be provided to each of the two sides in the debate.
Prime Minister Malcolm Turnbull has met with Cabinet, and the next step in the same-sex marriage debate has been taken.
The Government plans to hold a plebiscite, or national public vote on February 11 next year.
Attorney General George Brandis made the announcement, which included what question Australians will be asked.
"Should the law be changed to allow same-sex couples to marry?' In the event the plebiscite were to be passed, then I would introduce legislation to give effect to the will of the people to amend the Marriage Act shortly thereafter. In legislating for a plebiscite, the Government is giving effect to a commitment made during the election campaign and endorsed by the Australian people."
The Attorney-General says the question is not worded to favour either side and has been chosen to ensure the process is fair.
Treated like an election, the plebiscite would be compulsory, with Australians given access to pre-poll voting, postal voting and declaration voting.
Ten members would sit on a committee to oversee advertising and information campaigns, one for the "yes" campaign and one for the "no" campaign.
Special Minister of State Scott Ryan says there will be special rules in place for those campaigns.
"There will be the requirement for authorisation of materials as is normal in the Electoral Act, and we will be seeking to include that to apply to what I might call new communications mechanisms such as robo calls and SMS messaging. There will be $7.5 million provided to each (the) 'yes' and (the) 'no' committee."
But all of this is dependent on the enabling legislation passing parliament.
It is expected to be introduced before the end of the week.
At this stage, it looks unlikely to pass.
With the Greens and key crossbenchers already opposed, the government would need Labor's support in the Senate.
Opposition Leader Bill Shorten remains coy about his party's plans, saying Labor will examine the legislation closely.
"So we're going to be talking further to people who are going to be affected by this vote. We'll be talking further to mental-health experts. But we have grave reservations: Is the emotional torment of people worth it? Is it worth $160 million, plus $15 million, plus whatever else gets spent? Especially when it's not binding on Government MPs?"
Prime Minister Malcolm Turnbull is accusing Labor of playing politics, indicating it is going to be a plebiscite or nothing.
"The only person that stands in the way of Australians having a vote on this issue, on 11 February, is Bill Shorten. He can enable that. There will be a plebiscite on the 11th of February unless Bill Shorten decides to block it. What he should do is get behind this commitment to democracy."
The Australian Christian Lobby says it would welcome the Government allocating public funds for both sides of the campaign.
But managing director Lyle Shelton has told the ABC a total of $15 million would be on the conservative side.
"In order for the public to be able to hear both sides of the arguments, well, that is on the low side. But I think it is good there is something at least there. We know that, in Ireland, that those who were supporting redefining marriage had a big influx of overseas money and outspent the 'no' side about 15-to-1."
Australian Marriage Equality chairman Alex Greenwich says the plebiscite is unnecessary and he would like to see a vote by elected officials.
"This is a very straightforward reform that doesn't need to be complicated by a plebiscite process. This is a reform that can be achieved by a free vote in this parliament and, indeed, something that we know may take them a bit of time to consult with their communities, and we think that is entirely appropriate."
