Health Minister Mark Butler said the bill he brought to the house on Thursday will stop the importation, manufacture, supply, and commercial possession of disposable single use and non-therapeutic vapes.
Under the crackdown, offenders could face up to seven years in jail or be slapped with fines of up to $2.2 million.
"The reforms are world leading, vaping is a very serious public health menace and the rapid rise in vaping among young people is creating a whole new generation of persons with nicotine dependence," Mr Butler said.
"That is why this bill is so critical to addressing these challenges now, the global health community is watching us closely.
"This is a crisis that deserves our national attention."
He said some of the chemicals contained in vapes were used in nail polish remover and even to embalm dead bodies.
The latest national data revealed one in six high school students recently vaped, and young people who vape are three times more likely to take up smoking.
Many vapes include ingredients like diacetyle, which damages passageways in the lungs, formaldehyde, which can contribute to heart diseases, and the weed killer acrolein.
Australian Medical Association president Steve Robson has urged all MPs to support the legislation.
"Big tobacco profits from the misery of others and uses every trick in the book to hook young kids on vapes," Professor Robson said.
"Fruity flavours, bright packaging, false claims that vapes are nicotine free and vaping shopfronts within walking distances of schools are all within big tobacco's arsenal of tricks.
"This is marketing sleight of hand at its absolute worst."
The Australian Dental Association is warning vaping could lead to a host of oral health issues in the next generation.
Mr Butler said enforcement would be bolstered by an additional $25 million for the Australian Border Force and an extra $56.9 million to the Therapeutic Goods Administration over the next two years.
Mark Butler says he's not willing to let a whole new generation get addicted to nicotine. (Lukas Coch/AAP PHOTOS)
The Australian Council on Smoking & Health urged parliamentarians to listen to the health experts and to stand their ground against the "current tsunami of big tobacco funded pro-vaping campaigns".
The health body's co-chief executive Laura Hunter said it was important to call out the deliberate confusion being generated by pro-vaping campaigns.
"We want Big Tobacco to butt out of children's health and leave it to public health experts who have no vested interest," she said.
The council said pro-vaping organisations commissioned misleading surveys and put out fake testimonials.
The only legal way to buy vapes will be therapeutically through a pharmacy, if the legislation passes parliament.
Since the January ban on the importation of single use disposable vapes, the Australian Border Force and Therapeutic Goods Administration have seized more than 360,000 vapes worth almost $11 million.
