The federal government has pledged $9.3 million over the coming year to help take 113 indigenous languages off the critically endangered list.
Of the 145 indigenous dialects spoken in Australia, 110 are at risk of being lost, a 2005 report found.
But under the government's national indigenous languages policy, there will be an increased focus on protecting the last vestiges of indigenous language.
Announcing the policy on Sunday, Indigenous Affairs Minister Jenny Macklin and Arts Minister Peter Garrett said more would be done to raise national awareness of the battle.
"These languages are ... a significant part of Australia's heritage and we must ensure they are protected for the benefit of future generations," Mr Garrett said.
"A focused and coordinated national approach is critical to safeguard indigenous culture and save these unique languages."
Communities will be encouraged to use endangered languages as much as possible and all efforts will be made to pass them on.
The 2005 report found that languages under threat were being spoken by small groups of people and mostly those aged 40 and over.
The policy will also encourage the teaching of indigenous languages in schools, although it is understood not to alter the course in the Northern Territory, where bilingual education is set to be scrapped in 2010.
Ms Macklin said language was an intrinsic part of identity.
"It is so important for all people to be aware and proud of their traditions and culture and this, of course, includes celebrating the unique qualities of their own language," she said.
About 30,000 people, both indigenous and non-indigenous, are presently involved in indigenous language studies around the country.
The policy is derived from the government's Maintenance of Indigenous Languages and Records program.
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