The Federal Government will invest $66 million for research into a coronavirus vaccine and antiviral medications.
Developing Australia's vaccine research was vital, Health Minister Greg Hunt said, for the nation's containment strategy and flattening of the curve.
Australia had been internationally lauded for one of the most accurate testing systems in the world, Mr Hunt said.
By midnight, Australia is set to surpass 1.5 million coronavirus tests.
Announcing the initiative at the Walter and Eliza Hall Institute of Medical Research in Melbourne, Mr Hunt said the new funding would ensure Australian lives were saved and protected.
More than 6.2 million people worldwide have been diagnosed with COVID-19, with 370,000 deaths.
In the past 24 hours, there were eight new coronavirus cases in Australia.
Five of those new infections were found in Australia's international travel hotel quarantine system.
"What that shows is that our border controls remain absolutely vital to protecting Australia," Mr Hunt said.
Facing questions from media, Mr Hunt said he did not blame Queensland Health for wrongly concluding a 30-year-old man, Nathan Turner, died of coronavirus.
The controversial incident has left many people in Blackwater, 190 kilometres west of Rockhampton, angry over the handling of the investigation.
Mr Hunt said "people have done the best that they can" in an "unprecedented" situation.
"They've been honest about their findings," Mr Hunt said.
"There will be challenges that individual states and territories have."
The initial positive post mortem result triggered mass testing and contact tracing in the Central Highlands town of Blackwater.
Victoria was under close observation by health authorities, Mr Hunt confirmed, following 10 new cases in the state in the last reporting period.
He urged Victorians to "stay safe", amid reports up to 10,000 may be planning to gather to protest the death of US man George Floyd.
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