The Australian Parliament's upper house, the Senate, passed a bill that allows the government to use Papua New Guinea's remote Manus Island to re-establish a detention center.
An agreement was made with the Papuan government earlier this year.
Many of the asylum seekers, most rescued off unseaworthy boats operated by people smugglers in Asia, will be transferred from an overcrowded detention center on Australia's Indian Ocean territory Christmas Island.
Once asylum claimants and refugees are in the Manus center, Australian authorities begin the process of establishing their identities and backgrounds. This could take months, the government has said.
Government figures also indicate around 4,000 asylum seekers have arrived in 60 boats in the two months since Parliament began debating the bill, a report by The Age newspaper said.
Papua New Guinea, with a population of fewer than 7 million, lies off the northern tip of Australia and has had close relations with Australia, which governed it until independence in 1975.
Papua New Guinea's rugged, jungle-covered Manus Island off its northern coast covers 800 square miles and has a population of 43,000, a 2002 census indicated.
Amid heavy criticism from Australian human rights campaigners, the Australian government closed the Manus center as well as one on Nauru in 2008 after operating them for around six years.
The Senate's Manus Island decision comes after Australia reopened the Nauru center last month.
Nauru, an almost circular island in the South Pacific, has a population of just more than 9,000 and is under the protection of Australia, although it has been independent since 1968.
From 2001-08, Nauru accepted aid from Australian in exchange for housing a refugee center.
Last week Immigration Minister Chris Bowen said he wanted to start sending asylum seekers to Manus within weeks of the bill being passed.
A report by ABC News said up to 600 people can be accommodated at the Manus center which the Australian army has been preparing for several weeks.
The government has started sending people to Nauru, including Sri Lankans and Afghans.
Bowen said in an interview with ABC News the government is "in a battle of the truth with people smugglers." The smugglers tell their human cargo not to worry about being sent to Nauru because it will be for only a short time, he said.
"And I think the people who've arrived in Australia have learned that that's not the case and several of them have taken the decision to return back to their country of origin."
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