Children younger than 16 could be kicked off social media before the end of 2025 but questions are still being asked about how that would work in practice.
Prime Minister Anthony Albanese and the seven state and territory leaders signed off on the "world-leading" ban at a national cabinet meeting on Friday.
Tasmania pushed for a lower limit of 14 years but agreed to go along with the rest of the nation for the sake of uniformity.
"Social media is doing social harm to our young Australians and I am calling time on it," Mr Albanese told reporters after the meeting.
The prime minister likened the move to "successful" bans on mobile phones in schools by states and territories.
"Kids are playing with each other at lunchtime, instead of playing on their phones. That's a good thing," he said.
South Australian Premier Peter Malinauskas, who first proposed a ban on 14-year-olds using social media but eventually landed on a 16-year cut-off, said the only "bad" that could come of it was young people would spend more time socialising with each other in the real world.
"We are talking about the most precious resource that our nation has - our young people - and they are being done harm by these social media giants, often industrialising addictive algorithms for their bottom line rather than for the interests of our young people," he said.
The government will introduce the legislation to parliament next sitting week and, with the coalition having previously flagged support, it could pass before the year is out.
The ban would come into effect 12 months later to give the industry, governments and the eSafety Commissioner time to implement it.
A current trial of age verification and assurance technologies is due to be completed in the first half of 2025.
But Monash University media expert Mugdha Rai said the legislation raised questions that would need answering.
"The legislation requires social media companies to take 'reasonable steps' to block people under 16," Dr Rai said.
"What would these 'reasonable steps' look like?
"How exactly will age be verified? By the platforms themselves? By a third party?
"Privacy concerns will clearly need to be addressed in either case."
The legislation would come with strong privacy provisions because it was designed to protect young people, Communications Minister Michelle Rowland said.
Tech giants are wary of a social media age limit, saying it should be up to app stores, not them, to enforce the rules to ensure safety across the board.
Meta, the parent company of Facebook and Instagram, argues against putting the onus on social media companies to enforce the proposed age limit, saying the technology for a perfect solution "isn't quite there yet".
Parents and young people would carry the burden if each app needed to implement its own age controls, Meta's Australia and New Zealand policy director Mia Garlick told ABC Radio on Friday.
Ms Garlick said Meta already implemented safety controls such as asking people their age at sign-up and using artificial intelligence to detect if their age appeared different.
While not a perfect solution, the ban would reduce the harm caused to children by social media, which was a driver of risky behaviour and has led to deaths after attempts to copy viral challenges, researcher Samuel Cornell told AAP.
But platforms played a critical role in young people engaging with education, potential employers, health services and personal networks of people with shared interests, RMIT information sciences professor Lisa Given said.
Ms Rowland said exemptions could be made for educational and health platforms such as YouTube Kids.
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