Australia has pledged A$200m (£106m; $166m) to help poorer nations mitigate the impact of global warming, in what is seen as a U-turn for the government.
Prime Minister Tony Abbott said the money for the UN-backed Green Climate Fund (GCF) would come over four years from the country's foreign aid budget.
Mr Abbott's conservative cabinet had earlier refused to join other wealthy nations in contributing to the fund.
Australia is one of the world's worst per capita greenhouse gas polluters.
On Tuesday, a report by two non-government organisations said Australia was the worst performing industrial country in terms of climate change.
The document blamed policy changes made by Mr Abbott's current coalition government.
What is the UN Green Climate Fund?
- The GCF is a key element of a 2009 plan to help developing nations cut their CO2 emissions and adapt to changes such as rising sea levels, droughts and heatwaves.
- The UN hopes to secure $10bn by the end of 2015.
- The fund is expected to play a major role in helping to secure a new climate deal at a UN conference in Paris next year.
- The US has promised up to $3bn, while Japan said it would pay $1.5bn into the fund.
The Australian government had previously said it would continue to give aid bilaterally to vulnerable countries in the Pacific region, rather than donate to the fund.
But Canberra had been under growing pressure to follow the example of other industrialised nations and contribute to the GCF.
In a joint statement, Australian Foreign Minister Julie Bishop - who is attending the UN climate change conference in Peru - and Mr Abbott said: "All countries should take practical and proportionate steps to take action on climate change while safeguarding economic growth."
The A$200, spread over four years, would take the fund beyond its target of $10bn, said the statement.
Ms Bishop is expected to reveal more details shortly at the conference in Lima.
Explaining his apparent change of policy on the issue, Mr Abbott later told reporters: "I've made various comments some time ago but as we've seen things develop over the last few months I think it's fair and reasonable for the government to make a modest, prudent and proportionate commitment to this climate mitigation fund."
Since it took office in 2013, Mr Abbott's government has scrapped a tax on carbon and wants to halve the country's legislated renewable energy target.
Environmentalists welcomed the latest announcement - but said any funds should not be taken from the country's foreign aid budget.