More than $50 million will be spent on research into long COVID, after an inquiry into the condition called for a national database on the coronavirus.
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The funding will allow experts to better understand the condition, where people retain COVID-19 symptoms several months after their first infection.
Federal Health Minister Mark Butler said the research will guide government plans to deal with long COVID in the future.
"Long COVID is an emerging health issue, both in Australia and internationally," he said.
"I have tasked my department with developing a national plan to respond to long COVID, taking into consideration the committee's findings."
The parliamentary committee, which released its final report into long COVID on Monday, made nine recommendations to the government including the establishment of a nationally coordinated research program into the condition.
Other recommendations included setting up a national database for COVID, which would be run by the future Centre for Disease Control.
The database would capture information such as infections, hospitalisations and complications, as well as information on long COVID and cases among high-risk populations.
The committee inquiry also recommended the government use the definition of long COVID as defined by the World Health Organisation, and review it as more information became available.
The WHO definition states long COVID is where symptoms continue or develop three months after the initial infection and last for at least two months.
The committee called for an improved vaccination strategy for COVID, along with regular reviews by the Pharmaceutical Benefits Advisory Committee into antiviral treatments.
The committee chair, Labor MP Mike Freelander, said more support would be needed to deal with the impacts of long COVID.
"We will need to help schools, universities, and workplaces adapt to allow the gradual return of people with long COVID. We will also need to train health professionals in how to diagnose and manage long COVID patients," he said.
"Our primary health providers need to be educated on how best to support and diagnose long COVID."
Dr Freelander also said it was a concern that women were more likely to be affected by long COVID than men, and a summit into the pandemic and government responses should be held.
Inquiry deputy chair Melissa McIntosh said it was crucial to determine how many people were affected by long COVID.
"We've learned throughout the process that anywhere between two and 20 per cent of people who have long COVID experience long COVID again - we don't have the data so we don't know exactly how many people have it," the Liberal MP told Sky News.
"Some people are so sick, they can't get out of bed, they've lost jobs, they're experiencing severe mental health issues."
Public health professor at Southern Cross University's National Centre for Naturopathic Medicine, Jon Wardle, said the impact of long COVID on patients was significant.
"Long-term sequelae are not only incredibly complex and highly individualised but also require equally complex and individualised approaches that health systems are rarely set up to do well," Prof Wardle said.
"The impact of long COVID not only necessitates a new way of thinking about addressing this emerging health priority, but also provides an opportunity to think about what other long-term syndromes have been largely overlooked."
Australian Associated Press
