The Broadband Performance Monitoring and Reporting programme will be under the charge of the Australian Competition and Consumer Commission.
It will look at data from about 4000 volunteer customers of retail service providers nationwide.
The programme had its pilot in 2015, a statement from Communications Minister Mitch Fifield claimed
It will allow consumers to compare peak period speeds through independent reporting.
The statement said: "Performance information is a key factor for consumers when purchasing plans from a retail service provider. The Government acknowledges that this will be vital as demand for data grows.
"By collecting and publishing information about the speed and reliability of broadband packages, consumers will be better placed to choose a plan that is right for them. It will also encourage retailers to compete on the quality of their broadband plans."
There will be a tender process to appoint an independent provider to run the programme and consumers will be invited to participate, through installation of a small device which will provide the data needed.
The performance information will be made public and the ACCC will shortly provide information on its website how to sign up.
ACCC chairman Rod Sims welcomed the government's announcement. "The programme will also allow the ACCC to determine if issues are being caused by the performance of the NBN, or by ISPs not buying sufficient capacity. It will also provide ISPs with independent performance information from which to draw when making speed claims," he said.
"The ACCC will begin publishing data later this year as a large number of consumers move to the NBN."
The ACCC said that complaints to the Telecommunications Industry Ombudsman about Internet data speeds had increased by 48% during 2015-16, the single largest issue for consumer complaints during the year.
It said there were about 13.3 million Internet subscribers in Australia in 2015-16, an increase of 4.2% from the previous year. Fixed-line data downloads increased by 52% between June 2015 and June 2016.