The money will also fund an online safety research program and the development of an Online Safety Charter for digital platforms.
In a statement, Prime Minister Scott Morrison said: "We must all work together to ensure the safety of our youngest Australians online, including parents, social media companies and the community.
"Nothing can be more important than protecting our children and in many cases this means defending them from dangers in the online environment."
A draft of the Charter will be developed over the summer and the final version will be released in 2019. A new research program will underpin initiatives to keep children and other vulnerable Australians safe online.
Communications Minister Mitch Fifield said: "Our new Online Safety Charter will clearly set out our expectations of industry. We will consult with the sector, stakeholders and most importantly parents over coming months to develop the Charter.
"Businesses who interact with children in the real world have to meet high standards of safety and digital businesses should be treated no differently.
"This generation is the first to be immersed in the digital world. There is much we don't know, and as technology evolves we are funding more research to improve online safety."
Education Minister Dan Tehan said: "We know how difficult it can be and how it can feel like it is too hard to take control but parents should be reassured that it is never too early — or too late — to start teaching responsible cyber-safe behaviour.
"That's why we are developing a new awareness campaign and funding new resources to help parents make sensible and safe choices about their kids' technology use from their very first exposure."