Public display of swastika or SS symbols is punishable by up to one year in prison.
But the new laws do not cover the Nazi salute.
The government says Nazi symbols are already banned in many states, but that decision means they won’t be allowed anywhere.
The move comes after a resurgence of far-right activities in the country in recent months.
In March, a group of neo-Nazis emerged at a rally in Melbourne and gave the Nazi salute on the steps of Victoria’s Parliament.
Announcing the new law, Attorney General Mark Dreyfus said: “There is no place in Australia for symbols that glorify the horrors of the Holocaust.”
“We will no longer allow people to profit from the display and sale of items that glorify the Nazis and their evil ideology.”
Dreyfus said in a statement that the ban covers the trade and public display of flags, armbands, T-shirts, insignia, and the posting of symbols supporting Nazi ideology on the internet.
However, public display of the Nazi swastika and SS symbols for academic, educational, artistic, literary, journalistic or scientific purposes will be permitted.