Children as young as four will receive cyber safety training from federal police and educators because of fears that some are producing sexually explicit material.
The federal government said on Tuesday it will extend the ThinkUKnow cyber safety training program to children in kindergarten and Year One and Two.
It will include information about the dangers of self-produced sexually explicit material, the grooming of children through online apps and games and the importance of adult supervision.
Prime Minister Malcolm Turnbull said it was "vital" that parents and teachers were aware of cyber safety.
“(They need to) educate themselves about the risks (and) discuss these openly with their children."
Last year, the Australian Federal Police received more than 10,000 reports of child exploitation material, arresting 91 alleged offenders.
Research by the e-Safety Commission showed nearly 50 per cent of children reported sharing photos of their face online.
While about a quarter said they had shared their last name or real age.
And six per cent went on to share their phone number or address online.
eSafety Commissioner Julie Inman Grant said there's a particularly disturbing trend being monitored by the e-Safety Commission's cyber report team.
"They're literally being flooded by images of kids as young as four to five in various states of undress," she said.
Australian Federal Police National Coordinator for Exploited Children Jayne Crossling said keeping kids safe on the web had never been harder.
"Children are being approached through games that are age appropriate but perhaps parents don't realise have a chat functionality that online sexual predators can actually approach them and groom them to do certain things."
Libby Rowe of Life Education, which runs the Healthy Harold education program, said: "we don't want the kids to be scared of being on the internet but be aware that there are risks and that those risks are real".
"We need to actually work out strategies whereby they realise that there are people out there who may not have their best intentions."
