The National Mental Health Commission will be folded into the health department after an independent investigation found evidence of a poor workplace culture.
Moving the commission's functions and funding to the department was included in the 2024/25 federal budget handed down on Tuesday.
The Albanese government also budgeted $588 million to set up an online mental health service that would allow struggling Australians to access appointments online without a referral.
The National Suicide Prevention Office will also be moved into the health department, with the changes to take place in October.
Health Minister Mark Butler pledged to strengthen the mental health commission after a review in 2023 found the workplace culture there to be very poor and discovered operating losses.
The investigation did not find substantiated evidence of bullying as alleged in some media reports but recommended moving the body into the health department.
This is to ensure the commission can fulfil its role in monitoring the government's policies and spending measures on mental health and suicide prevention.
Independent senator David Pocock said commonwealth spending on mental health had been the lowest since 2018 - at a time when wellbeing was harmed due to the COVID-19 pandemic.
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