Cabinet has agreed to keep two renewable energy agencies that the former Abbott government attempted to dismantle.

Key points: The decision to keep both renewable energy agencies reverses Abbott government policy

The decision to keep both renewable energy agencies reverses Abbott government policy They will jointly manage a fund drawn from the existing allocation

They will jointly manage a fund drawn from the existing allocation The Clean Energy Council is worried the plan will reduce investment to the sector

Tony Abbott's efforts to ditch the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) were blocked by the Senate.

When Malcolm Turnbull defeated Mr Abbott and took over as Prime Minister his approach to both agencies was more positive.

He has now confirmed that his inner circle of senior ministers has agreed to drop the Abbott government policy.

"We're retaining both of those agencies and we are establishing a new $1 billion Clean Energy Innovation Fund," he said.

"What that is going to do is every year invest $100 million in the smartest, most cutting-edge, Australian, clean energy technologies and businesses to ensure that we not only drive jobs and innovation in Australia, but also play our part in [reducing emissions]."

Mr Turnbull made the announcement alongside Environment Minister Greg Hunt, who conceded he was previously critical of the CEFC.

Mr Hunt said significant changes had been made to the corporation, including changes to its mandate.

Mr Hunt said the Government would see the entire $1 billion funding returned, stating "our goal is to receive 100 per cent of the taxpayers' money back, but with an additional return".

The two agencies will jointly manage the Clean Energy Innovation Fund, but the money will come out of the existing allocation.

Greens say move is 'tricky political manoeuvre'

Greens leader Richard di Natale said the Government did not deserve any praise for retaining the climate agencies.

Senator Di Natale said Mr Turnbull had effectively gutted renewables funding, saying "Tony Abbott should never be the benchmark for good climate policy".

"What we need to do is judge this policy against whether it sets out what we need," he said.

"This proposal from Malcolm Turnbull is a con job, it's a sleight of hand … [The Government has] used a tricky political manoeuvre to actually gut funding for ARENA, to change its mandate, to stop it driving the innovation which is necessary, and then expects those of us who care deeply about the nation's response to global warming to pat it on the back? Well. no."

Move 'constrains' funding, 'does not make up for other reductions'

Clean Energy Council chief executive Kane Thornton says he is worried the fund could give with one hand while taking with another.

"Essentially it is removing funding from the Australian Renewable Energy Agency and really just constraining it in terms of its ability to provide capital grants to the sector into the future," he said.

The CEFC is a government-owned organisation, set up under Labor, to provide funding for renewable energy projects.

ARENA is an independent agency established around the same time to manage the government's renewable energy programs, with a primary aim of increasing the supply of renewable energy in Australia.

The agency uses its funding to "invest in projects and initiatives that hasten the commercialisation of renewable energy solutions and diversify Australia's energy mix", according to its site.

Labor has described the Cabinet decision as window dressing, and says it does not make up for the reduction in funding for other projects.

Mr Turnbull also defended the $3.3 million in funding recently allocated to investigating the health risks associated with wind farms.

He said that while some people were sceptical, it was "a matter of concern to a lot of people".