The latest Closing the Gap agreement was inked in July by all levels of government and the Coalition of Peaks, a representative body of around 50 Indigenous groups.

It includes 16 targets, including closing the life expectancy gap between Indigenous and non-Indigenous Australians by 2031.

The $46.5 million funding outlined in Tuesday's federal budget will be used to partner with Indigenous organisations, to help them build their capacity and business models.

The Productivity Commission will provide independent oversight of the new Closing the Gap agreement and will be given an extra $10.1 million over four years to help with annual progress reports and reviews.

The federal budget also includes $150 million over three years for the Indigenous home ownership program, for new dwellings in regional Australia.

It aims to help Indigenous Australians own a home while supporting regional construction.

An extra $39.8 million has also been earmarked for the Clontarf Foundation to help thousands of students finish school.

The Australian Institute of Aboriginal and Torres Strait Islander Studies has also been given $10 million over four years to help more cultural items return to traditional owners.

Australian Associated Press