Education Minister Dan Tehan wants universities to implement a free speech code by the end of 2020 and will ask students whether diverse views are tolerated.
The Morrison government wants universities to stamp out "cancel culture" on their campuses as part of a push to protect free speech.
It also anticipates the higher education sector will soon be back on a surer footing as the global coronavirus crisis eases.
Education Minister Dan Tehan will outline the next stage of his planned "reshaping" of higher education in a speech to the sector's peak body Universities Australia on Wednesday.
His plans are structured around the recommendations from three reviews handed to the government in 2019.
One of these outlined a model code for free speech on campuses, after libertarian and right-wing groups raised concerns about an emerging culture of silencing voices people disagreed with.
"It is up to university leaders, including chancellors, to demonstrate to their student body what the freedom (of speech) means," Mr Tehan will say, a draft speech shows.
"It means tolerating the opinions of others, especially when those opinions are anathema to our own. In the marketplace of ideas, no one should have the power to 'cancel' the people whose views they don't like."
The government wants all universities to adopt the code by the end of 2020.
It will check in with students whether they feel all views are tolerated at their institution, with a new question on the regular student experience survey.
Universities have been hit hard by the coronavirus outbreak, with nearly 95,000 Chinese students who travelled home for the holidays unable to return for the new academic year due to travel bans.
Mr Tehan will tell universities leaders he is proud of how they have worked with the government to minimise disruption to the sector.
The government has asked regulators to give providers maximum flexibility in how they can accommodate stranded students.
"One day, and I hope that day comes very soon, our higher education sector will resume normal operations; the travel ban on China will be lifted and the remaining China-based students will arrive to begin studies for the year," Mr Tehan will say.
"Until such time we all must continue to work together on innovative solutions to our shared problems."