The government will introduce new legislation allowing foreign state entities to be classified as "state sponsors of terrorism" under the Criminal Code.
The changes are intended to strengthen Australia's counter-terrorism framework and send a message that Australia does not tolerate foreign state-sponsored terrorism, according to a statement sent by Attorney-General Michelle Rowland's office.
The legislation will "help ensure that foreign states that seek to fuel division, create fear and erode social cohesion in the Australian community will be held to account," the statement read.
The legislation follows the Australian Security Intelligence Organisation (ASIO) declaring in late August that Iran's Islamic Revolutionary Guard Corps directed two antisemitic attacks in Australia, including the firebombing of the Adass Israel synagogue in Melbourne last December.
"While these attacks may have been targeted to one part of our community, they were attacks on our sovereignty and our collective way of life," Rowland said.
"The government's legislation will make it more difficult, more risky, and more costly for malicious foreign actors to seek to cause Australia and our community harm," she said.
The bill would introduce offences criminalising engagement in, or support for, terrorist acts involving listed state sponsors of terrorism, and criminalise forms of interaction with them, including membership, association and the provision of funding.
Home Affairs Minister Tony Burke said the legislation "sends the strongest possible signal that the Australian government places the Australian community's safety and security as its top priority".
"Our government wants Australians to be safe and feel safe, and we stand together in unity and strength against any and all attempts at division and hatred," he said.
Iran has denied involvement in antisemitic attacks in Australia, saying shortly after Australia's expulsion of its ambassador that the conclusion "makes zero sense".