Almost 2000 extra scholarships will be available for regional and remote university students as part of a $135 million federal funding boost for higher education.
It includes extra money to build or expand regional study hubs in every state and the Northern Territory.
Federal Education Minister Dan Tehan announced the funding at the University of the Sunshine Coast's Sippy Downs campus on Monday.
"Every Australian, no matter where they live, should have access to Australia's world-leading higher education system," Mr Tehan said.
"Our commitment to regional education is in the national interest because we need to support regional communities to retain and attract smart young people."
The package includes $34.1 million for an additional 1955 scholarships for regional and remote students over four years.
However, Universities Australia says the extra money has come from cuts to university research budgets.
Although regional universities desperately need funding, it's reckless taking it out of research funding, UA chief Catriona Jackson says.
"It is folly to be undermining the nation's future by raiding precious research funding when Australia already spends far less than our economic competitors in the region and the world," she said in a statement on Monday.
James Cook University Vice-Chancellor Professor Sandra Harding says the new funding will allow an expansion of a successful diploma of higher education program.
"Almost 11 per cent of students in this program have been Aboriginal and/or Torres Strait Islanders and 10 per cent have English as a second language," she said.
"Student success rates as they transition from the program are strong."
Five regional universities have been singled out to share in $92.5 million to support more students.
A national strategy for increasing regional, rural and remote higher education participation will also be developed, with an advisory group chaired by former Victorian premier Denis Napthine.
Regional Universities Network chair Professor Greg Hall said 70 per cent of graduates from regional universities stay on to work in the regions.
"A one-size-fits-all policy for higher education does not meet the needs of regional Australia or the nation," he said.
"Place-based initiatives, such as those announced, are needed to make a difference."
