Migration levels are expected to return to pre-pandemic trends over the next couple of years after the COVID-19 catch-up wears off.
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Net overseas migration is forecasts to hit 510,000 in 2022/23, based on the annual update from the Centre of Population, before moderating to 375,000 in 2023/24.
By 2024/25, net overseas migration will ease to 250,000, based on the government body's projections, closer to pre-pandemic averages.
Even with the temporary migration surge underway, net overseas migration is forecast to be 185,000 lower over the period 2019/20 to 2022/23 than was predicted before the pandemic kicked off.
"Much of the higher net overseas migration reflects a catch-up of low, and at times negative, migration over the pandemic, as well as a surge in global demand for international study and a strong domestic labour market," the 2023 population statement said.
Normalising migration patterns, as well as a declining fertility rate, are expected to slow population growth in coming years.
The fertility rate is expected to ease from 1.66 babies per woman in 2022/23 to 1.62 by 2030/31.
Looking further into the future, Australia's population is expected to reach 29.8 million by 2030/31 - 100,000 above what was projected in the last federal budget, but 600,000 fewer than predicted pre-pandemic.
Australia's population is also getting older, with the median age projected to increase from 38.5 years in 2021/22 to 39.8 years by 2033/34.
Acting Treasurer Katy Gallagher said the government was prepared for the big demographic trends and transitions underway.
"The government has an ambitious agenda that takes account of these trends, to help improve living standards and build a stronger, more sustainable and more inclusive economy," Senator Gallagher said.
She said the government's migration strategy, unveiled earlier in the month, would "ensure Australia has a carefully calibrated migration system that works in our economic national interest".
"We are also working to improve the liveability of our cities, suburbs and regions including through significant investments in housing supply, a recalibration of the infrastructure pipeline, and substantial investments in Medicare and essential services."
Australian Associated Press
