The federal government is considering fining social media companies such as Facebook and Twitter if they refuse to remove material deemed harmful to young people from their sites.

Communications Minister Malcolm Turnbull and Parliamentary Secretary for Communications Paul Fletcher on Wednesday said the federal government would legislate to create a new position of Children's E-safety Commissioner by the end of the year.

Safety: The government has promised to protect children from cyber bullying, aiming to legislate on the issue by the end of 2014.

The commissioner will have the power to issue notices to large social media sites to remove content deemed harmful to young people such as cyber-bullying postings. The commissioner will also be able to issue notices to individuals to take down malicious content aimed at children. If they refuse, they may be referred to state police.

The commissioner will also educate the community about tackling cyber bullying.