Hundreds of detainees are refusing to leave the illegal detention centre on Papa New Guinea's Manus Island, established and run by the Australian government in order to keep refugees out of Australia.

Facing domestic and international pressure, Canberra will close the controversial detention centre on October 31.

The government has announced the relocation of 800 refugees and asylum seekers within the island's general population.

Refugees worry for their safety in the larger community of Papua New Guinea's north coast.

Behrouz Boochani, a Kurdish-Iranian journalist held on Manus Island for four years, said detainees fear being assaulted if they moved to the new, Australian-funded Lorengau Refugee Transit Centre.

"Refugees either move to Lorengau, where they risk being attacked by angry local people, or be taken over by PNG defence forces who have already seriously threatened their safety," Boochani said.

Last week, the United Nations warned of a "humanitarian crisis" amid fears Australia would walk away completely from any involvement with refugees on the tiny Pacific Island.

Australia refuses to allow asylum seekers arriving by boat to reach its shores, instead detaining them in offshore centres on Manus and the South Pacific island nation of Nauru.

The UN and rights groups have for years cited human rights abuses among detainees in the centres. The Papua New Guinea Supreme Court ruled in 2016 that the Manus centre was illegal and the government in the capital Port Moresby ordered its closure.

Australia had hoped the detainees would be either resettled into Papua New Guinea society or the United States, under a controversial refugee swap, by the time the centre closed.

So far, only 54 refugees have departed for the US.

Deputy Commissioner of Australian Border Force Mandy Newton said on Monday that Australia would fund the operation of three new transit centres on Manus for detainees.

"I estimate it will cost between 150-250 million [Australian dollars] ($117m-$195m)," Newton told a Senate hearing in Canberra.

Refugee advocates said the new funding will not end a standoff between asylum seekers and Australia, which they fear threatens to escalate into violence.

In April 2016, the Supreme Court of Papua New Guinea ruled that the Australian detention of refugees and asylum seekers on Manus Island was illegal.