The Australian Government will levy a 30% tax rate effective from 1 July this year on iron ore and coal mining companies, following approval from the senate.
The government intends to distribute the benefits of that revenue to other segments of the economy.
Australia Treasurer Wayne Swan was quoted by the BBC saying: "This important reform will provide a revenue stream to ensure that businesses in particular that are not in the fast lane of the resources boom get some tax relief."
The proceeds from the new tax will be used to reduce Australia’s company tax rate from 30% to 29%.
The legislation, which received 38 votes in favour of the law, was driven by the mining boom as demand for raw materials from China and India grows.
The new measure has been backed from the ruling Labor party and the Greens party.
However, the conservative opposition coalition opposed the tax saying it will drive investment overseas and cut jobs in the nation.