Australia is to send 150 special forces troops to Afghanistan by September to help counter increasing rebel attacks.
Mr Howard is seen as a staunch US ally
Prime Minister John Howard said the deployment would begin in the run-up to Afghanistan's parliamentary elections and would last 12 months.
Canberra sent more than 1,500 troops to Afghanistan in 2001 but they were withdrawn the following year.
The decision to send soldiers back followed requests for support from the Afghan government, Britain and the US.
"It's fair to say that the progress that's been made in the establishment of a legitimate government in Afghanistan has come under increasing attack and pressure from the Taleban in particular and some elements of al-Qaeda," Mr Howard told reporters.
Mr Howard did not say where the Australian troops would be based.
But he said that at least some of them will be under the operational control of US forces, and correspondents say this suggests that they are likely to be deployed in southern or eastern Afghanistan, where a wave of violence has killed hundreds of people in recent months.
These regions have seen intensified clashes between US forces and insurgents who back the former Taleban regime, along with a string of attacks against Afghan security forces and prominent clerics who support the government.
Mr Howard said Canberra would also consider dispatching to Afghanistan up to 200 soldiers as part of a reconstruction team early in 2006.
Australia currently has one engineer in Afghanistan involved in mine clearance.
The US-led coalition has some 18,000 troops pursuing remnants of the Taleban and al-Qaeda in southern and eastern Afghanistan, while Nato has a further 8,000 peacekeepers based in other parts of the country.
Nato says it expects to temporarily increase its current force of around 8,000 troops by a further 2,000-3,000 to provide extra security ahead of the elections.