New Zealand will give Papua New Guinea and aid agencies up to $3 million to help care for Manus Island refugees.
Prime Minister Jacinda Ardern spoke with her Australian counterpart Malcolm Turnbull yesterday at the East Asia Summit on the situation at the decommissioned Australian-run centre.
About 400 refugees are refusing to leave the camp since its closure two weeks ago, despite food, water and power being cut.
They say they fear for their safety if moved to transit centres.
Ms Ardern said officials from both countries were working together to establish a screening process that could be quickly put in place if and when Australia accepted the government's offer to take 150 people from Manus Island and Nauru.
"Our officials will continue to work closely with Australian officials so that we are prepared in the instance that Australia will take up that offer.
"That is more progress than we've had on the offer in a number of years."
Ms Ardern said it could take up to five months before the offer could be completed.
She said the government would in the mean time provide financial aid to care for the refugees.
"We intend to work with PNG and other agencies like the International Red Cross to financially support them with any additional needs that may need to be met while those refugees remain on the island."
She said that assistance recognised New Zealand had a role to play in the region.
And she said she did not believe the offer would be an embarrassment for Australia.
The UN's refugee agency yesterday urged Australia to accept New Zealand's offer to resettle 150 refugees.
Two motions introduced in Australia's parliament by the Labor and Green parties, and passed in the upper house yesterday, call on Mr Turnbull to approve the New Zealand proposal.
Mr Turnbull this month rejected the refugee resettlement, preferring instead to work through an existing refugee swap deal he negotiated with former US President Barack Obama last year.
Under the US deal, up to 1250 asylum seekers detained by Australia in Papua New Guinea and Nauru in the South Pacific could be resettled in the United States in return for Australia accepting refugees from Central America. So far, the United States has accepted only 54.
- RNZ / Reuters