New laws to curb the influence of spies and ban foreign political donations will be introduced to federal parliament before the end of the year.
Attorney-General George Brandis confirmed on Tuesday a review of Australia's espionage and foreign influence laws had been completed.
He said the government will put forward draft laws with a suite of changes addressing political influence from other countries.
"The threat of covert foreign interference is a problem of the highest order and it is getting worse," Senator Brandis told parliament.
The draft laws will seek to:
* ban foreign political donations
* enhance and reform the espionage and foreign interference-related offences in the criminal code
* introduce a Foreign Influence Transparency scheme, modelled partly on the United States' Foreign Agents Registration Act.
The American laws, which began in 1938, require people acting as agents of foreign principals in a political or quasi-political capacity to disclose on a website their relationship with the foreign principal, as well as their activities, receipts and spending.
Senator Brandis said espionage, sabotage, treason and secrecy offences will be reviewed and a new category of offences criminalising certain acts of covert foreign interference introduced.
The proposed changes come after media reports earlier in the year of Chinese Communist Party influence over the Liberal and Labor parties.