The programme known as 457 visa allows business to employ foreign workers for a period up to four years in skilled jobs where there is a shortage of Australian workers.
"We are an immigration nation, but the fact remains: Australian workers must have priority for Australian jobs, so we are abolishing the 457 visa, the visa that brings temporary foreign workers into our country," said Prime Minister Malcolm Turnbull.
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"We will no longer allow 457 visa to be passports to jobs that could and should go to Australians," he said.
He said Australia will adopt a new 'Australians first' approach to skilled migration.
As at September 30, there were 95,757 workers in Australia on primary 457 visa programme, ABC reported.
The programme will be replaced by another visa programme, with new restrictions.
"It is important businesses still get access to the skills they need to grow and invest, so the 457 visa will be replaced by a new temporary visa, specifically designed to recruit the best and brightest in the national interest," Turnbull said.
Turnbull said the new programme will ensure that foreign workers are brought into Australia in order to fill critical skill gaps and not brought in because an employer finds it easier to recruit a foreign worker than go to the trouble of hiring an Australian.
Turnbull's announcement comes days after he visited India where a rangeof issues, including national security, counter terrorism, education and energy, were discussed and six agreements were signed.
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