Prime Minister Scott Morrison told a media conference on Sunday that social media companies would be considered as publishers under the reforms.
Under the rules, social media platforms will have to set up a complaints system so that defamatory comments could be taken down, and trolls identified with consent.
There would also be new Federal Court orders that make it mandatory for the companies to provided details of trolls to victims who would then be able to sue them for defamation.
In September, the High Court ruled that owners of Facebook pages were responsible for any comments posted by third parties in response to content placed by the owner.
The ruling was made in a case involving former Northern Territory youth detainee Dylan Voller, with the comments in question having been posted below news reports from numerous outlets on their Facebook pages. The new rule would reverse this onus.
“Social media can too often be a cowards’ palace, where the anonymous can bully, harass and ruin lives without consequence,” Morrison said.
“We would not accept these faceless attacks in a school, at home, in the office, or on the street. And we must not stand for it online, on our devices and in our homes.
“We cannot allow social media platforms to provide a shield for anonymous trolls to destroy reputations and lives. We cannot allow social media platforms to take no responsibility for the content on their platforms. They cannot enable it, disseminate it, and wash their hands of it. This has to stop.
“These will be some of the strongest powers to tackle online trolls in the world.
“Anonymous trolls are on notice, you will be named and held to account for what you say. Big tech companies are on notice, remove the shield of anonymity or be held to account for what you publish.
“In a free society with free speech, you can't be a coward and attack people and expect not to be held accountable for it.”
Meta, the parent company of Facebook, Alphabet, the parent company of Google and YouTube, and Twitter, three platforms that could be affected by these rules, are yet to make any public comment about them.