Laws introduced to federal parliament on Wednesday will ban the sharing of fake pornography where a person's image is superimposed on sexually explicit material.
The changes are part of efforts to reduce gender-based violence in Australia.
Attorney-General Mark Dreyfus said the non-consensual sharing of deepfakes predominantly targeted women.
"Explicit material that is shared without consent is a damaging and deeply distressing form of abuse, this insidious behaviour is degrading, humiliating and dehumanising for victims," he told parliament.
"The bill will hold perpetrators to account for causing harm through the non-consensual sharing of deepfakes and ensure Australia's criminal offences keep pace with new technology."
Under the laws, people found sharing the deepfakes without consent will face a maximum of six years behind bars.
Those found to have created the images and then gone on to share them online will face up to seven years.
While the laws will target the sharing of non-consensual deepfakes, they will not cover the creation of the content.
It comes as the federal government has boosted funding to the online safety watchdog to address harmful practices such as doxxing.
Mr Dreyfus said the legislation follows urgent talks between state and territory leaders at national cabinet in May to address gender-based violence.
"The bill includes specific defences too ensure the offences are targeted and proportionate," he said.
"The Albanese government is committed to keeping Australians safe from technology-assisted abuse."
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