"If the north does well, our country does well," Mr Abbott said in Canberra on Thursday. "Northern Australia can grasp its full potential and become an economic powerhouse within our great country. We will drive down the costs of operating in the north for business, making it a more attractive place to invest and work."
At its heart is a bold ambition to increase the population of the northern parts of Queensland, Western Australia and the Northern Territory from 1 million people now to up to 5 million people by 2060.
Under the 20-year-plan, the federal government will allocate $200 million for water storage. There was also a $600 million roads package to improve key transport hubs in the far north.
Other aspects of the plan include a major northern investment forum in Darwin targeted at international investors, $75 million for a cooperative research centre on developing northern Australia, $15.3 million for tropical health projects and $12.4 million for indigenous rangers.
Deputy Prime Minister and Infrastructure Minister Warren Truss said the Coalition would also attempt to cut red tape to encourage businesses to invest in the north.
There will also be schemes to help attract workers to the regions. Overseas working holiday makers will have their visas extended for one year if they are employed in northern Australia. The three-year multiple entry visa will also be extended to 10 years in a bid to promote tourists, especially from China.
Qantas chief executive Alan Joyce said he looked forward to working with the federal government to develop an aviation strategy to open up northern Australia to fast-growing Asian markets.
Chinese Vice Minister of Commerce Wang Shouwen said Bejing saw opportunities in Australia's north primarily in agriculture, food processing and infrastructure.
"Indeed our view is your strategy of developing the Northern Territory needs investment," Mr Wang said in a briefing on the new free trade deal with Australia.
"China is the third largest investor globally and there is strong interest in investing in Australia … in the agricultural sector, food processing sector. China is very strong on infrastructure … and this [sector] could also benefit from more open investment," he said.