Prime Minister Anthony Albanese announced on Monday plans for the mRNA manufacturing partnership had been finalised.
Up to 100 million mRNA vaccine doses will be produced every year.
Moderna will also set up its headquarters and a Regional Research Centre in Victoria.
In a statement, Mr Albanese said the COVID-19 pandemic had given a "once in a generation" opportunity to safeguard the nation in the face of future public health crises.
"The pandemic has shown us how important local manufacturing capability is to our security and to our health," he said.
"This significant deal will protect Australians and Australian sovereignty."
Meanwhile, Australia's latest wave of infections may be nearing its end but new subvariants could soon bring a further spike in cases, an epidemiologist warns.
NSW and Victoria combined reported fewer than 10,000 new infections on Monday, while about 35,000 cases were announced nationwide over the weekend.
The seven-day average for case numbers in Australia has dropped to the lowest level since mid-February, according to Johns Hopkins data.
University of South Australia epidemiologist Adrian Esterman said while the wave linked to the highly infectious BA.4 and BA.5 Omicron subvariants appears to have troughed, subvariants continue to emerge.
"We're seeing a wave (of infections) due to new subvariants every three to four months and we have done for the last eight months," he told AAP.
"So if the same pattern continues, we might expect a new wave from a new subvariant around November. And there's already a couple on the horizon."
Professor Esterman said the BA.2.75 variant was taking over as the dominant strain in India, while BA.4.6 had begun to take hold in parts of the United States.
Those strains were almost certainly already in Australia but it was too soon to know whether they would become dominant or if a subvariant that caused more severe infections would assume their place, he said.
"There's absolutely no guarantee the next wave that comes along isn't going to be incredibly severe. We simply don't know," Prof Easterman said.
States and territories have largely rolled back protections including mask mandates.
But Prof Esterman said the persistence of the virus meant there was a need for more public health measures including greater education around mask-wearing and the importance of booster shots
"More important than the peaks of the waves is the height of the trough in between them," he said.
"That's staying relatively high and that means there's constant pressure on our hospital systems and there's constant pressure of people getting long COVID."
LATEST 24-HOUR COVID-19 DATA:
NSW: 5490 cases, six deaths, 2178 in hospital with 59 in ICU
Victoria: 3648 cases, 15 deaths, 571 in hospital with 27 in ICU
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