The announcement comes as nations prepare for the U.N. Climate Summit in Doha, Qatar this month.
The Kyoto Protocol, set to expire at the end of this year, required wealthy nations to limit greenhouse gas emissions by 5.2 percent on average for the period 2008-12 from 1990 levels.
Agreement on a new globally binding agreement isn't expected until 2015.
The next phase of the Kyoto agreement would effectively function as a bridging deal until a long-term plan can be agreed upon.
Australia's Climate Change Minister Greg Combet said the government would commit to limiting its greenhouse gas emissions from 2013 to 2020 "with a Kyoto target consistent with the bipartisan target of reducing emissions to 5 percent below 2000 levels by 2020."
But Combet outlined some conditions for Australia's commitment.
"For Australia, there must be continued progress toward this new agreement by 2015, from both the developing and developed countries alike," Combet said in making the announcement Friday.
The Kyoto agreement mainly targeted wealthy nations, requiring them to limit emissions of greenhouse gases, and excluded developing nations -- such as China and India, which are now considered the heaviest emitters.
"The Kyoto Protocol is not enough on its own -- it will cover less than 15 percent of global greenhouse gas emissions and only from a number of developed economies," Combet said.
"So to be effective, the new 2015 agreement needs to cover all the major emissions sources."
The United States never ratified the Kyoto agreement because the treaty didn't impose targets on developing nations such as China and India. Japan and Russia have said they wouldn't sign an extension of Kyoto because it fails to cover enough of global greenhouse gas emissions.
"The government's decision will help bolster international efforts to secure a new legally binding agreement to cover all major emitters by 2015," Erwin Jackson, deputy chief executive officer of The Climate Institute, said in a statement.
"A second round of targets under Kyoto is a critical lever to achieving a new legal binding agreement that covers all major emitters."
Just a few hours after Australia's announcement Friday, New Zealand said it was abandoning its pursuit of a second phase of Kyoto.
The country's International Climate Change Negotiations Minister Tim Groser said New Zealand "will be aligning its climate change efforts with developed and developing economies which collectively are responsible for 85 percent of global emissions," including the United States, Japan, China, India, Canada, Brazil and Russia.