Australia's marine reserves will increase from 27 to 60 under the new scheme, covering more than 3 million sq km, or one third of the island nation's waters.
The announcement of the network was made a week before more than 130 heads of state and government will gather in Rio de Janeiro for the United Nations' sustainable development conference as part of global efforts to curb climate change, one of the biggest conferences in U.N. history.
New reserves will be established from the Perth Canyon in the southwest to Kangaroo Island off the southern coast, but the "jewel in the crown" will be the protection of the Coral Sea area which surrounds the Great Barrier Reef in the northeast, Environment Minister Tony Burke said on Thursday.
"The Coral Sea marine national park ... combined with the Great Barrier Reef area, becomes the largest marine protected area in the world," Burke said.
The protection plan will ban oil and gas exploration in all marine national parks, including across the Coral Sea and off Margaret River, a popular tourist and wine-growing area in the southwest.
Burke acknowledged the plan would also have an impact on the fishing industry. The plan attracted immediate criticism from some environmental groups, as well as independent and opposition politicians and lobby groups.
"This is devastating and those that will suffer most will be coastal communities," Dean Logan, chief executive of the Australian Marine Alliance, which represents commercial and recreational fishers, told Australian television.
Burke said the government would talk to the fishing industry about compensation during a 60-day consultation period.
"NOT FAR ENOUGH"
A lawmaker from the minority Greens party said the government had been bowing to oil and gas interests in drawing up the boundaries for non-exploration areas.
"The boundaries the minister has determined have been very strongly determined on oil and gas prospectivity, and clearly determined by lobbying from the oil and gas sector," Rachel Siewert, the Greens' marine spokeswoman, told reporters.
Conservative opposition leader Tony Abbott said the plan would "damage the rights of commercial fishers and commercial tourist operators".
Wildlife and environmental groups also said the steps did not go far enough to protect marine mammals from the impact of oil and gas exploration in many areas.
"Offshore petroleum exploration hasn't been addressed properly by this process," said Matthew Collis, a campaigner for the International Fund for Animal Welfare.
"This is bad news for whales and dolphins because many of the areas where industry operates or wants to operate are also important habitats for whales and dolphins," he said.
Earlier this month, a United Nations report said Australia's world-famous Great Barrier Reef was under threat from industrial development and may be considered for listing as a world heritage site ?"in danger" within the next year.
Last week, Australia delayed environmental approval for a A$10 billion coal project proposed by India's GVK Power & Infrastructure in Queensland state that would increase shipping traffic through the Great Barrier Reef.
Copyright @ Thomson Reuters 2012