Defence Minister Richard Marles confirmed the deployment was a precautionary measure that would support Australians in the region in case the security situation deteriorates.
As a result, there will be three RAAF aircraft in the area, though the government has not identified where they will be deployed or the exact number of troops that will accompany them.
"We want to make sure that we are prepared so that, if this does escalate, we're in a position to act," he told ABC radio on Wednesday.
"Three aircraft gives us reasonably significant capacity to lift Australians out if an evacuation is required."
Liberal senator Jane Hume said the opposition welcomed the measure.
"Any demonstration of unequivocal support for Israel at this time is fundamentally important," she told Sunrise.
Any Australians remaining in the Middle East have been urged to leave while they still can as experts warn fallout from Israel and Gaza is likely to spread into neighbouring countries.
"If you are in the region now and you want to leave, you should take whatever commercial options are available to you," Mr Marles told Sky News.
"This is a very volatile situation and no one knows exactly how it will play out."
Israeli airstrikes killed 700 Palestinians in the Gaza Strip overnight, the highest 24-hour death toll since Tel Aviv began its total blockade on the territory around two weeks ago.
Since then the government has laid siege to the 2.3 million Palestinians living in the territory, meaning no food, water, fuel or electricity has reached them.
Though some aid trucks have been allowed through, humanitarian organisations say there are not nearly enough to address the dire situation.
The Australian government is working with 79 people who are trapped in Gaza but Mr Marles acknowledged they were in a "very difficult situation".
"We're very much encouraging those people to move south within Gaza ... but at this point, we've been unable to get those people out," he said.
The news comes as Israel's ambassador to Australia defends his nation's right to self defence following the Palestinian death toll rising to more than 5000.
Hamas' October 7 attack on Israel left more than 1400 dead with about 200 people taken hostage.
Since then, retaliatory strikes have killed more than 5000 Palestinians and left a million displaced.
Israeli ambassador Amir Maimon says it is complying with international law in strikes against Hamas.
Ambassador Amir Maimon said Tel Aviv was acting in accordance with humanitarian law.
"Innocent Israelis are suffering following this barbaric attack of the Hamas," he said.
"You don't measure the legitimacy of the Israeli response by the number of the casualties.
"You measure it by the adherence of the Israeli government to the international law, we are adhering, complying to the international law."
Mr Maimon will address the National Press Club on Wednesday as pressure mounts on Prime Minister Anthony Albanese to visit Israel on his way home from the US.
Australia is continuing to call for a humanitarian corridor out of Gaza after Jordan secured the release of four Australians and a permanent resident from the West Bank.
The prime minister and foreign minister have said all innocent lives matter and have called for Israel to act in accordance with international law.
Cabinet minister Ed Husic, a Muslim, has called the blockade stopping fuel and supplies into Gaza "collective punishment", going further than his cabinet colleagues.
He said while no one disputes Israel's right to defend itself against the terrible attack, he was simply calling for "a strategic, more precise way to deal with Hamas" that takes into account the toll being borne by innocent Palestinians.
"People understand Hamas needs to be held to account, but there is genuinely a concern in the community," he told ABC TV.
Hamas is a prescribed terrorist group by the Australian government.
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