"We're on track to continue our record-breaking run of growth in international education," he said.
“We are thankful that so many international students choose to enhance their knowledge and skills in Australia, providing a richer and more diverse experience for both Australian students and other international students.”
The half-million mark represents a 54 per cent increase in the number of international students in Australia over the last five years.
The number accounts for students enrolled in higher education, vocational education and training (VET), Schools, English Language Intensive Courses for Overseas Students (ELICOS) and non-award sectors.
The number of Nepalese students jumped 54 per cent, while there was a 29 per cent increase in students from Colombia.
The number of Brazilian students bound for Tasmania more than tripled, and Western Australia saw a one-third jump in its number of Bhutanese student arrivals.
China makes up the largest proportion of students from a single country at 31 per cent, followed by India, Nepal and Malaysia at 12, five and four per cent respectively.
Mr Birmingham said international students are extremely valuable to Australia.
“International education is vital to the people-to-people links and knowledge sharing between Australia and the rest of the world,” he said.
“Recent data from the Australian Bureau of Statistics has shown the value of international education jumped 22 per cent from 2016 to $32.2 billion last year.”
The report comes a week after One Nation Senator Pauline Hanson said she wanted to strip international students of work rights.
Senator Hanson said the work rights of international students were making it difficult for Australian citizens to get jobs.
“These people are supposed to be self-supporting when they come into Australia. But they are given the opportunity to do twenty hours work a week and they can actually have unlimited work when they're not studying.That is wrong because that is impacting on the other Australians getting jobs,” she told Sky News.
“Come out here, do your studies. But work visas - no."
Bijay Sapkota, president of the Council of International Students Australia, disagreed with Senator Hanson.
“A lot of industries in Australia rely on international students, tourism for one. Every year, parents of many students visit Australia. The hospitality industry is also heavily reliant on students,” he told SBS News.
“I see a significant lack of common sense on the part of Ms Hanson while projecting international students as some sort of burden.”