Prime Minister Julia Gillard spoke to the leaders of both countries by telephone this morning.
PNG Prime Minister Peter O'Neill said he was prepared to offer Manus Island as a processing centre for asylum seekers, while Nauru's President Sprent Dabwido also said he would allow Australia to process asylum seekers in his country. He described his conversation with Ms Gillard as positive and productive.
Once the measures are approved by parliament, it could take just days for the offshore processing to begin. Defence Force chief David Hurley said he could have a reconnaissance team ready to send off as early as Thursday evening or Friday morning.
Australian Immigration Minister Chris Bowen said the so-called Pacific Solution will cost $AU2 billion over four years for Nauru and $900 million for Papua New Guinea.
The newly-sworn in Governor of Manus Island, Charlie Benjamin, learned of the proposed reopening of the processing centre this morning, and said he supports the idea.
"What will Manus gain? Maybe more along the line of infrastructure development that the Australian Government can help the people of Manus," Mr Benjamin said.
Offshore processing was previously scrapped by the current Labor Government which described it as "costly, unsustainable, and wrong". It is being reintroduced after a government-appointed expert panel recommended a number of changes to the current policy, including an eventual increase in the number of refugees accepted by Australia.
The Immigration Minister Chris Bowen has admitted that the laws are necessary to stop boats but admitted they will have to work hard to make sure the system is managed humanely. Some left faction Labor MPs are despondent about the policy shift but are not expected to fight it.
In order for the amendments to be implemented they will need the backing of the opposition Coalition. The minority Greens Party has already said it will oppose the plans.
This afternoon's vote comes as the Australian Customs and Border Protection Service works to confirm reports that another 67 asylum seekers have died trying to reach Australia by boat.
Australia's Home Affairs Minister Jason Clare says they believe the group left Indonesia six weeks ago but there is no evidence that they have reached Australia.