The Australian federal government has announced more than 559 million AU dollars ($538.8 million) in funding to help Australian health and medical researchers make new health discoveries, a joint media release by Prime Minister Tony Abbott and Minister for Health Peter Dutton said on Wednesday.

The funding will support 963 grants across three National Health and Medical Research Council (NHMRC) research support schemes and five fellowship schemes.

The investment in these innovative projects is aimed at finding better treatments for many common diseases such as cancer, diabetes, asthma, arthritis and cardiovascular disease as well as finding new ways of tackling mental illness, dementia and indigenous health.

"The federal government is committed to ensuring that Australia remains a world leader in medical research," the press release said.

Ongoing, long-term funding of medical research improves quality of life and life expectancy and, at the same time, takes pressure off the hospital system.

Australia is among the top five countries in the world in producing scientific articles per capita and in the past decade alone, Australia's health and medical research sector has produced three Nobel Prize winners.

"It is only through sustained investment that we can retain our scientific talent, generate health discoveries and fully reap the benefits of health and medical research," Prime Minister Abbott was quoted as saying.

Medical research is an essential part of the Australian government's plan to build a more diverse, world-class five pillar economy.

This round of funding includes 652 project grants worth 423.5 million AU dollars ($408.2 million) and will support investigator-initiated research projects in clinical, biomedical, public health and health services research.

Six partnership projects worth 4.5 million ($4.3 million) will support researchers and policy makers to identify tailored, evidence-based solutions that improve health practice. Twelve European Union Collaborative Research Grants worth 4 million (3.8 million US dollars) will also support Australian researchers working in multinational research collaborative projects.

In addition, 293 fellowships totaling 126.9 million ($122.3 million) will help to build a strong cohort of future researchers.