Nearly $70 million will be spent to combat the virus, which has been detected in NSW, Queensland, South Australia and Victoria and killed two people so far.
Federal Health Minister Greg Hunt said the virus was concerning but state governments were being proactive about responding with Commonwealth support.
There are 15 confirmed human cases of Japanese encephalitis in Australia.
Following health advice about people at risk, the government will purchase 130,000 doses of a vaccine to supplement the 15,000 doses already in Australia.
Australia's Deputy Chief Medical Officer Sonya Bennett says while the virus is new to mainland Australia, it was not new internationally and vaccines have been successfully used for decades.
"What's important to understand is that it is transmitted to humans through mosquito bites, it cannot be transmitted human-to-human," she told reporters in Canberra on Friday.
"From a human point of view, those most at risk are people who work in the affected piggeries and people doing animal and mosquito control."
To understand the spread of the virus, the government will enhance surveillance of mosquito and animal activities, model the potential virus spread as well as undertake mosquito control.
"We understand the virus but what we hadn't anticipated is seeing it emerge as quickly as it has in piggeries throughout the states," Dr Bennett said.
"We are dealing with where the virus is and also mounting a surveillance effort to understand where it has been and where it may go."
The government will spend $5 million on an information and awareness campaign to help people understand how to protect themselves.
This involves "covering up, wearing repellent, doing all of the things that people are used to doing to protect themselves in an area where there are mosquito-borne diseases," Mr Hunt said on Friday.
Meanwhile, $10 million will be spent to support state and territory agriculture departments responding to the virus.
13°C