Foreign Minister Julie Bishop has been discussion how to tackle foreign fighters and home-grown radicals at a meeting in New York.
Australia has joined 29 other countries to work on new ways to stop young people being radicalised and to deradicalise those who have joined terrorist groups.
The commitment comes as US Secretary of State John Kerry revealed at a forum attended by Foreign Minister Julie Bishop that the estimated number of foreign fighters in the Middle East had skyrocketed from 20,000 to 30,000.
Ms Bishop said it was now known that terrorists were being drawn from at least 100 countries around the world, including 120 from Australia.
She said it was the first time she had publicly heard the 30,000 figure.
"We believe there are a number from Indonesia, the Philippines, Malaysia and Australia," she told AAP on Sunday.
"Our numbers have doubled since last year but I don't expect it to double again by next year."
She said Australia's efforts were having an effect but the tide had not yet turned.
Ms Bishop attended a Global Counterterrorism Forum event in New York on Sunday, on the sidelines of the United Nations General Assembly.
The 30-member group, which also includes the UK, US, Canada and New Zealand, has been working for four years on ways to counter the recruitment of terrorists and ensure strong national laws are in place to deal with terrorism.
The latest initiative involves talking to the peak bodies in charge of Islamic schools and colleges about how to better educate students about peace and preventing violent extremism.
The initial work would involve the Organisation of Islamic Cooperation and the Islamic Educational, Scientific and Cultural Organisation.
"We have to work very hard with families and communities and schools to first identify those who are vulnerable and intervene if a form of radicalisation is underway," Ms Bishop said.
Australia is also working with Indonesia on intervening in jails and once convicted terrorists are released back into the community.
"In the coming years hundreds of prisoners in Indonesian prisons who have been convicted of terrorism related offences will be released," she said.
"If they have not been rehabilitated, it poses a serious risk not just to Indonesia but to our region."
The group involving Australia has resolved to put together a set of tools and practices to help countries address what Mr Kerry called the "full life cycle of radicalisation and violence".
The term "life cycle" is now being used to describe the movement from radicalised youth to terrorist.