Peter Dutton's proposal seeks to do away with the so-called medevac (Medical Evacuation) law, which gives doctors more powers to decide on evacuations, and which was approved in February when the government was in the minority.
The medevac law was passed as a result of a campaign following reports of deteriorating mental health of the detainees, including minors.
"As a nation it is imperative we are able to determine who enters Australia and whether they should remain in our borders permanently," Dutton said in Parliament.
The Medevac provisions give the government powers to reject a transfer on security grounds but does not include "any mechanism of expulsion or return" of the refugees to Nauru and Manus.
The reform seeks "to allow for their removal from Australia or return to a regional processing country once they no longer need to be in Australia for the temporary purpose for which they were brought," according to the text of the draft.
Dutton claimed that the bill would fix a situation created by "a short-sighted political tactic" of the opposition Labor Party to appeal to voters of the Green Party ahead of May elections, in which the conservative coalition got another term and increased its majority.
The government has a sufficient majority to get the bill passed in the Lower House but would need to garner more support in the Senate.
According to a Home Affairs report presented before the Senate, around 900 asylum seekers have been transfered to Australia since 2013, when it opened offshore detention centers in the Pacific. Of these, 282 were returned to Nauru and Manus while the rest remained in centers in Australia.
So far, 31 medical evacuations have been approved under Medevac, while nine have been rejected, according to a report in The Guardian last month.
Since the Liberal-National coalition won the elections in May, reports have emerged of about 100 attempts of self harm and suicide among asylum seekers on Manus, which Dutton termed as attempts to use Medevac to enter the country.
Many of the refugees and asylum seekers that Australia intercepts at sea have fled conflict-ridden countries or regions such as Afghanistan, Darfur, Pakistan, Somalia and Syria, or have escaped conditions of discrimination or statelessness such as the minority Rohingyas in Myanmar or the Biduns in the Persian Gulf.
( With inputs from IANS )