The funding includes measures to improve water quality by encouraging better farming practices, scientific research towards reef restoration and building more resilient coral by tackling the coral-eating corn of thorns starfish.
The funding, announced on Sunday ahead of the May budget, is targeted at reducing fertiliser use to minimise agricultural run-off and improve water quality.
The Great Barrier Reef is home to some 400 types of coral, 1,500 species of fish and 4,000 varieties of molluscs, and contributes some AU$6.4 billion annually to the country's economy.
Climate change also affected the creatures that live in the reef system.
"It's not working, it's not achieving major water quality improvements", he said.
Conservationists said while the funding was "an important step", the biggest threat to the reef was global warming and not enough was being done to combat it by embracing clean energy.
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"We'll be improving the monitoring of the reef's health and the measurement of its impacts", Environment Minister Josh Frydenberg said at the plan's announcement on Sunday. Crown-of-thorns starfish were responsible for nearly half of this decline.
"Australia must make the transition from burning polluting coal to a 100 percent renewable powered future if we are to protect the future or the reef", she said in a statement (via 9News).
The government will partner with the Great Barrier Reef Foundation in an agreement worth $444 million to mitigate the effects of climate change, reduce pollution, and deal with crown-of-thorns starfish, the coral-eating starfish that can munch their way through corals when they explode in numbers.
"You can not protect the reef from puddles of warm water sitting over the entire northern GBR, together with all of the cyclones that came at the same time which were also climate-related".
Earlier this month, scientists said the site suffered a "catastrophic die-off" of coral during an extended heatwave in 2016, threatening a broader range of reef life than previously feared. The reef has lost a large percentage of its coral in recent decades due to a variety of environmental stresses.
"These funds represent an unequaled opportunity to create a legacy of hope for future generations".