Immigration Minister Amanda Vanstone said the changes would benefit Australian employers who were struggling to find workers because of a skilled labour shortage.
Several new categories of visas will be available, including one which will allow foreign students to undertake vocational study while completing a trade apprenticeship in a rural area.
"This gives them the chance to get a trade qualification that will equip them with skills in demand by employers who cannot find skilled staff locally," Vanstone said.
Another new category will allow foreign students to work for up to 12 months in Australia in their area of expertise after they complete their studies.
Vanstone said the traditional backpackers Working Holidaymaker programme has also been expanded to counteract a shortage in skilled labour.
Under the changes, backpackers who have done at least three months of harvest work, such as fruit picking, will be able to apply for a second 12-month working holiday visa.
Foreigners were previously only able to apply for one such visa in their lifetime.
"These changes reflect the government's commitment to helping Australian employers access the labour they need," Vanstone said.
In other changes, the government has reduced the English language and financial test for some student visa applications because of an improvement in visa compliance.
The new tests will apply to students from Bahrain, Britain, Chile, Czech Republic, Estonia, Hungary, Kuwait, Mauritius, Peru, Seychelles, Singapore, Slovenia, Trinidad and Tobago, United Arab Emirates and the US.