A new inquiry will be held into the ditching of a medi-vac plane in the ocean near Norfolk Island in 2009.
The decision follows a Canadian inquiry into how the Australian Transport Safety Bureau investigated the incident.
A nurse was seriously injured in the incident after bad weather stopped the Pel-Air plane from making a refuelling stop at Norfolk Island.
The inquiry by the Canadian Transport Bureau was commissioned after a highly critical report by a Senate committee on the Australian investigation.
Infrastructure Minister Warren Truss told parliament the Canadians found errors were made in the Pel-Air investigation.
As a consequence, he has asked the ATSB to reopen the investigation.
Mr Truss revealed the move during a ministerial statement on the government's response to a review of aviation safety, which largely focused on the role of the air safety regulator, the Civil Aviation Safety Authority.
The aviation industry has accused the authority of regulating with a heavy hand and little regard for commercial realities.
Mr Truss acknowledged industry complaints.
But CASA's job was difficult because it served both the industry and the public, he said.
Mr Truss also announced three new appointments to the CASA board.
They are sports aviator and company director Anita Taylor, pilot and aviation insurance expert Ian Smith and Murray Warfield, who became a Qantas pilot and executive after a RAAF career.
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