However PNG says they will only do so as part of a wider processing programme that also deals with other refugees already there, such as those from West Papua.
This issue and Papua New Guinea’s decision to force Australian contractors from the country by the end of the year will feature in talks next week between Prime Minister Tony Abbott and Peter O'Neill in Port Moresby on the sidelines of the Pacific Islands Forum next week.
Papua New Guinea has told Australia it only wants to settle refugees who are skilled workers.
PNG High Commissioner to Canberra Charles Lepani has told SBS that cabinet is considering the proposal.
"On the Australian side of course they want us to quickly resettle because it sends the sign to people smugglers that they are not resettling in Australia but in PNG or somewhere else," he said.
"We have West Papuan refugees who are Melanesians like us, they have been there longer than any new refugees coming in, including those who enter PNG illegally across the borders and the ones that arrive by boat."
"We can't just deal with asylum seekers and get that policy addressed when there are other refugees that are confronting PNG.”
On Manus Island there are currently around 1000 asylum seekers, many have already been processed.
PNG figures indicate around 50% of them have been found to be refugees.
"Our position that we have conveyed to the Australian Government is that we would prefer skilled refugees who we can easily accommodate in our employment areas where we can't provide a skilled workforce" Mr Lepani said.
Jenny Hayward-Jones from the Lowy Institute of International Policy says the resettlement topic is complicated in Papua New Guinea.
“It is a very sensitive issue,” she said.
“PNG did make a promise to Prime Minister Kevin Rudd back when they made the deal that PNG would undertake the resettlement of any asylum seekers found to be genuine refugees and to date, even though a number of asylum seekers have been found to be genuine refugees, they haven't been able to leave Manus.”
In the talks next week the Australian Government also hopes to smooth over divisions with Prime Minister Peter O'Neill following his decision to order Australian contractors out of the country by the end of the year.
Ms Hayward-Jones believes there may be a compromise reached on this issue.
“I think PNG will probably be the loser if all of them were to depart on mass so I think what we'll see is an attempt at compromise perhaps negotiating an extension to that deadline but probably negotiating a change of status.”
Hundreds of Australians are employed as contractors in a range of Government roles.
Also under discussion will be the future of Australian Federal Police on assignment in PNG.
Australia's request for immunity for visiting police officers is another issue yet to be resolved.
