Prime Minister Scott Morrison announced the nearly Aus$18 billion package -- equivalent to just under one percent of GDP -- which will primarily be targeted at businesses.
"This plan is about keeping Australians in jobs. This plan is about keeping a business in business," said Morrison. "This plan is about ensuring the Australian economy bounces back stronger on the other side of this." Much of the money is expected to be distributed by the end of June, the country's treasurer said.
Australia has seen 136 confirmed cases of coronavirus, and three deaths. Morrison acknowledged the stimulus would mean he will not meet an election pledge to balance the country's budget -- a key plank of the party's pitch to voters last year.
The central bank has repeatedly cut rates to historic lows while warning that the coronavirus outbreak could have "large and long-lasting" effects.
Morrison had on Wednesday announced a separate $1.6 billion war chest to bolster medical services that are likely to come under intense strain as the virus spreads in the coming months.
He is expected to make a rare televised address to the country later on Thursday to speak about the broader challenges faced by the COVID-19 outbreak.