Australia said it was suspending its extradition treaty with Hong Kong and announced measures to attract people and businesses from the Asian financial hub, after China imposed a new security law there.
Prime Minister Scott Morrison said the new national security law introduced last week in Hong Kong was a fundamental change of circumstances and Australia would suspend the extradition agreement.
"There will be citizens of Hong Kong who may be looking to move elsewhere, to start a new life somewhere else, to take their skills, their businesses," Mr Morrison said.
China criticised the decision saying it was a "gross interference" in its affairs.
A statement from a spokesperson at China's embassy in Canberra said: "China strongly deplores and opposes the groundless accusations and measures announced by the Australian government with regard to Hong Kong."
New Zealand said it was also reviewing its relationship with Hong Kong due to the new security law, which means Hong Kong suspects can be sent for trial to courts in mainland China.
Mr Morrison said Hong Kong students, graduates and workers in Australia on temporary visas, will have the opportunity to stay and work for an extra five years and apply for permanent residency after that time.
There are 10,000 Hong Kong citizens in Australia on student visas or temporary work visas, with a further 2,500 outside Australia and 1,250 applications on hand, according to the government.
Future student visas would also be offered for five years, however Mr Morrison said they were "not expecting large numbers of applicants any time soon".
Australia offered asylum to some 42,000 Chinese students who were in Australia after a violent crackdown on pro-democracy protests Tiananmen Square in 1989.
Hong Kong applicants would be prioritised under Australia's Global Talent Scheme and business visa programme.
"There is so much talent in Hong Kong," said Acting Immigration Minister Alan Tudge.
"There are great businesses in Hong Kong. And we know that many individuals now might be looking elsewhere, because they do want to be in a freer country, they want to be in a democratic country."
Australia also made a pitch for international financial services, consulting and media businesses with regional headquarters in Hong Kong to relocate to Australia.
"If there are businesses that wish to relocate to Australia, creating jobs, bringing investment, creating opportunities for Australia then we will be very proactive in seeking to encourage that," said Mr Morrison.
The measures would be accommodated within Australia's existing caps on permanent resident visas, and Hong Kong citizens could also apply to the humanitarian and refugee visa programme, he said.
Australia changed its travel advisory for Hong Kong, where around 100,000 Australians live and work, to say "reconsider your need to remain in Hong Kong" if they are concerned about the new law.
The travel advice for Hong Kong warns Australians "may be at increased risk of detention on vaguely defined national security grounds".
Hong Kong's new security law punishes acts of secession, subversion, terrorism and collusion with foreign forces with up to life in prison.
The new law has pushed China's freest city onto a more authoritarian path and drawn condemnation from some Western governments, lawyers and rights groups.
Canada last week announced it would suspend its extradition treaty with Hong Kong in the wake of the legislation and could boost immigration from the former British colony.
Australia's Foreign Minister Marise Payne held a teleconference overnight with her counterparts in the Five Eyes security arrangement, which includes the UK, US, New Zealand and Canada, about Hong Kong and the new security law, Ms Payne and UK foreign secretary Dominic Raab said on Twitter.
Today I spoke with ???? ???? ???? ???? on global security, including concerns that the NSL imposed on #HongKong undermines One Country Two Systems & trust in international agreements. We will work together for human rights & freedoms @DominicRaab @SecPompeo @winstonpeters @FP_Champagne— Marise Payne (@MarisePayne) July 9, 2020
New Zealand said its review of relations with Hong Kong would include a review of the extradition arrangements, controls on exports of strategic goods and travel advice.
"New Zealand remains deeply concerned at the imposition of this legislation on Hong Kong.
"We will continue to monitor the law's impact on the people of Hong Kong, with whom we share close links," Foreign Minister Winston Peters said.