Cheaper passports are on the way as the government moves to online applications.

Internal Affairs Minister Chris Tremain says the current $153.30 fee is set at cost recovery level and online applications will cut the cost.

"Online applications have been trialled successfully and will be available to the public by the end of the year," he said on Wednesday.

"This will streamline the process of applying for a passport and reduce costs, providing the opportunity to look at the level of fees."

Mr Tremain says reducing the fee will need a change to the regulations, and he isn't saying when that will happen.