Sports Minister Greg Hunt says he's satisfied Australia's bid for the 2023 Women's World Cup won't fall victim to the problems which doomed the country's push for the 2022 men's tournament.
But the federal funding is to be split as a safeguard, with an initial $1 million to be given, while an additional $4 million will be dependent on the bid having a reasonable chance of success.
"We think that there is a real chance that Australian can host the 2023 Women's World Cup," Mr Hunt told Sky News on Tuesday.
The government ploughed $45.6 million into the bid for the 2022 World Cup, which was awarded to Qatar after a controversial bidding process in which Australia won just one vote.
Major corruption scandals prompted sweeping reforms within FIFA, but there has been criticism of the speed of change.
Despite allegations continuing to surround soccer's governing body, Mr Hunt said the government had received assurances about the probity of the organisation.
"I am satisfied on the advice we've had (FIFA is clean)," he said.
"But both myself and the prime minister wanted to be absolutely sure, that's why we've done this in two stages."
Prime Minister Malcolm Turnbull said hosting the tournament would inspire a new generation of female sporting stars.
"Wouldn't it be fantastic to have the Matildas contesting a Women's World Cup on home soil?" he said in Canberra earlier on Tuesday.
The World Cup will bring together 24 nations and is expected to reach a global audience of more than 700 million people.
Football Federation Australia president Steven Lowy said the Cup was the biggest and most prestigious tournament in women's sport.
"We believe that time is right for Australia to host it as well as win it," he said.
The Matildas have made the quarter-finals in the last three World Cups as well as the Olympics last year.
More than 270,000 women and girls played soccer in Australia last year - an eight per cent increase in two years.
Matildas players past and present, and those hopeful to join the squad in future, also attended the announcement at Parliament House.
"If it was held in Australia it would have a massive impact on women in sport and female role models because it would bring more people to games," said Young Matildas squad member Princess Ibini.