From July, eligible apprentices in housing construction or clean energy will receive $10,000, paid in $2000 instalments at the six, 12, 24 and 36-month milestones and upon completion.
The $626 million commitment is the first time the allowance has been increased since 2003 and it will be announced by Prime Minister Anthony Albanese during an address at the National Press Club on Friday.
"We recognise the next generation of tradies - the people we're counting on to build the new homes we need - are under significant financial pressure," he will say in his speech.
"Too many leave training, because they can't afford to stay.
"More new homes, more new energy and more support for the tradies who will build both."
A $626 million commitment for apprentices is the first time the allowance has increased since 2003. (Lukas Coch/AAP PHOTOS)
The Housing Industry Association said the focus on fee-free TAFE was distracting from the real issue facing housing supply.
"Successive governments have been aware of the persistent and structural skill shortages across key construction trades for decades and the current policy approaches are doing very little to shift the dial," Managing Director Jocelyn Martin said.
"The priority must be to support the domestic workforce, wage subsidies for apprentices are a key part of this."
Master Builders Australia chief executive Denita Wawn said labour shortages were the biggest handbrake on fixing the housing crisis.
"Coupled with government funding of fee free vocational education and training, there is no better time to pick up the tools and become a tradie," she said.
Opposition Leader Peter Dutton said close to zero of the 1.2 million homes the government promised had actually been built.Â
"It just hasn't happened, and that's why people are feeling the crunch," he told Nine's Today.
"They can't rent a house, they can't buy a house, and people are right to be angry."
Mr Albanese has previously used his beginning-of-year press club address to unveil major reforms.
During his 2024 speech, the prime minister revealed he would rejig stage-three tax cuts to provide more for middle-income earners after promising to deliver the former coalition government's original plan.
With voters set to hit the ballot boxes before May 17, Mr Albanese is expected to use the upcoming opportunity as a pre-election launching pad.
He has spent the first weeks of the year courting voters across the country with infrastructure funding and a promise to "build Australia's future".
Cost of living is expected to be at the front of voters' minds.
Though the government has provided relief through changes to prescriptions, energy bill help and other policies, polling suggests Australians have grown increasingly disillusioned with Labor.
Many have instead turned to independents and minor parties, increasing the likelihood of a minority government.
