Under the reservation plan, gas exporters will have to set aside 20 per cent of their volume for use in the domestic market.
The scheme will come into effect from July 2027, and apply to three LNG exporters based in Queensland.
Industry Minister Tim Ayres says gas prices will come down as a result of the scheme, but hasn't detailed the amount consumers can expect to pay in the future.
"We are not making predictions about specific price levels, but this will provide the lowest possible price for Australian households and Australian industry," he told ABC TV on Friday.
The scheme will be grandfathered, with gas export contracts signed before the reservation plan was announced in late 2025 being excluded.
The gas industry has criticised the proposal, saying there was a lack of detail and could cause a downturn in investment.
Senator Ayres said the federal government would be working closely with the sector on the scheme on how it would work.
"We'll be working through those details over the coming months with industry to make sure that there's not scope for industry to ... game the process," he said.
Nationals leader Matt Canavan, also a former resources minister, said the government was playing catch up on a gas reservation.
The coalition did take a policy of a gas reservation on the east coast to the 2025 federal election, which would have added between 10 to 20 per cent extra to domestic supply in its first year of operation.
"I'm putting it out there to them to me how a 20 per cent reservation policy is going to make a difference when 35 per cent of gas in eastern Australia is already supplied to domestic market," he told ABC Radio.
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