The money will be available under the second round of AustCyber's Projects Fund and Andrews encouraged firms that contribute to the sector to apply before 12 July.
“Australia’s cyber security industry is continually growing and this funding will further boost our ability to become a global leader in the field, creating more Australian jobs while also making the nation more cyber-resilient,” she said in a statement.
“According to a report released by AustCyber last year, the global cyber security market is projected to be worth almost US$250 billion by the year 2026.
“The Morrison Government is committed to supporting the cyber security industry to reach its full potential by capturing a significant share of the global market and creating jobs for the future.”
Companies will be able to obtain matching funding, ranging from $100,000 to $3 million, up to half of the cost of eligible projects.
AustCyber was set up in 2015 as part of the Growth Centres Initiative, part of the government's plan to create 1.25 million jobs over the five years to 2020.
Daniel Lai, chief executive of ASX-listed Canberra-based cyber security firm archTIS, said the additional money was a welcome move so soon after the election.
"While $8.5 million in new funding is an increase on the previous initiative, for an industry that is growing rapidly, is of national importance and is forecasted to be worth US$250 billion by 2026, it seems like a small investment," he said.
"Needless to say [it is] a step in the right direction. Obviously we would like to see this increase substantially again next year."