The Federal Government will abolish the 457 visa and replace it with two new visas, Prime Minister Malcolm Turnbull says.

Key points: The move is about "jobs for Australians," the PM says

The move is about "jobs for Australians," the PM says Number of occupations eligible for two-year visa will be reduced

Number of occupations eligible for two-year visa will be reduced Changes would stop "open-ended" nature of 457 visas, which often lead to migration

Current visa holders will not be affected by the changes, which will see the introduction of two new temporary skills visas — a two-year visa and a more specialised one for four years "targeted at higher skills".

Mr Turnbull said the new system would be "manifestly, rigorously, resolutely conducted in the national interest".

"The migration program should only operate in our national interest. This is all about Australia's interest," Mr Turnbull said.

"This is about jobs for Australians."

Immigration Minister Peter Dutton said the Government would also slash the number of occupations available for the two-year visa, down from the current tally of more than 650.

Mr Dutton said there would be a grandfathering arrangement for current visa holders, but the changes would stop the "open-ended" nature of the scheme.

"The existing 457 visa program is conducted for a period of four years, but essentially it is open-ended, and it results, in many cases, in a migration outcome," he said.

"What we propose is that under the temporary skills shortage visa short-term stream there will be a two-year visa, with the options of two years, but there won't be permanent residency outcomes at the end of that."

The announcement follows a crackdown on 457 visas last month, when Mr Dutton said the Government would scrap the fast-track arrangements in place for 457 skilled work visas for fast food chains.

Last year, the Government also indicated it would review the visa category and the list of jobs skilled migrants could apply for under the visa.

Further changes have been indicated by the Department of Immigration and Border Protection — an internal newsletter obtained by the ABC highlighted "possible further adjustments to eligible occupation lists" among a number of changes planned to come into effect in July.

The newsletter also outlined caveats for a number of roles that remained on the approved occupations list, including chefs, cooks and cafe managers.

These roles will not be made available under the scheme for fast food outlets, coffee shops or "drinking establishments that offer only a limited food service".

The visa is designed to fill job vacancies which are difficult to find Australians for and allows holders to bring members of their family to Australia on a 457 secondary visa.

The latest figures from the Immigration Department stated there had been a drop in 457 visas holders in Australia to 95,758 in September 2016.

The majority of the visa holders were from India, which accounted for almost a quarter of the intake, followed by the UK and China at 19.5 per cent and 5.8 per cent respectively.

Opposition Leader Bill Shorten, whose party had been calling for tougher restrictions on the use of skilled migrants, tweeted that "the only job Malcolm Turnbull cares about saving is his own".

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Mr Turnbull would not say whether the policy was influenced by One Nation and the success of the populist party, instead saying "it is a decision of the Government".

"It's followed on from a very careful examination of many of these issues by the review," he said.

"This has been a careful exercise in policy development, and we're announcing the conclusions today."

Speaking later to Sydney radio station 2GB, Mr Turnbull denied the policy was a result of pressure from conservatives within the party, saying "it's not about politics, it's about policy".

One Nation leader Pauline Hanson on Twitter claimed credit for the changes.

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Labor Senator Penny Wong told Lateline she thought Mr Turnbull had backflipped on the issue because of the polls.

"The Coalition lined up to criticise Labor when we raised concerns about the 457 program, when we said that there should be labour market testing, when we said there was exploitation in the system, and we were accused by them of dreadful policy, of vilifying skilled migrants," she said.

"Now magically Malcolm Turnbull's had a change of heart because I suspect the polls are telling him that he's got a problem when it comes to the lack of local jobs.

"Well, I for one don't believe that this is really what Malcolm wants to do. I think this is what Malcolm thinks he has to do."

On the other side of the globe, US President Donald Trump will sign an executive order on foreign workers.

The order — titled "Buy American, Hire American" — will change the visa arrangements for high-skilled workers, with the White House stating that the program is currently undercutting American workers by bringing in cheaper labour.

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ABC/AP