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The Australian government has reached a deal that will allow asylum seekers arriving by boat to be transferred to Malaysia for processing.

Immigration Minister Chris Bowen says up to 800 refugees will be sent to Malaysia over the next four years.

In return, Australia says it will accept higher numbers of refugees whose claims have been processed by the UN.

Activists have often criticised Australia's attempts to set up refugee detention centres in other countries.

Under former Prime Minister John Howard, Australia followed the so-called Pacific Solution by opening immigration detention facilities in Papua New Guinea and the island of Nauru.

Many refugees were detained for months under high security, and some went on hunger strike to protest against their living conditions.

The Labor Party was highly critical of the policy while in opposition, and closed the facilities in 2008 after it came to power.

But the detention system has come under increased pressure in recent months, with growing numbers of asylum seekers from Sri Lanka, Afghanistan and Iraq arriving by boat.

And riots at centres on Christmas Island in March, and in Sydney in April, have prompted public calls for a tougher line.

In recent days, it emerged that officials were in talks with Papua New Guinea to re-establish a centre there.

And Mr Bowen announced the deal with Malaysia on Saturday.

"The key message this will deliver to people-smugglers and those seeking to make the dangerous sea voyage to Australia is: do not get on that boat," he said in the statement.

More than 6,000 asylum seekers arrived in Australia by boat during 2010.

Government officials told the ³ÉÈË¿ìÊÖ that the agreement to take 800 refugees was only part of their plan, confirming that discussions with Papua New Guinea would continue.

Opposition politicians accused the government of hypocrisy.

"Today we've seen a panicked announcement from a government which is proving yet again that it's both untrustworthy and incompetent," said opposition leader Tony Abbott.

Mr Abbott and many other opposition politicians support the idea of holding asylum seekers in overseas centres while their claims are processed.

Under former leader Kevin Rudd, the Labor Party was staunchly against the idea.

But current Prime Minister Julia Gillard, who replaced Mr Rudd last year, has signalled she is willing to open camps in foreign countries.

She insists, however, that her actions are not a return to the policies of the former government.

She says she is trying to find a regional solution to a regional problem.