The intake almost doubles the number of people currently allowed into Australia through its humanitarian program, which is currently capped at 13,750 each year.
Priority would go to persecuted minorities -- especially women, children and families -- who are currently in camps in Jordan, Lebanon and Turkey, Abbott announced Wednesday.
"We want the 12,000 to come in as quickly as possible. We're not putting a timetable on it because we do have to make all of these important checks; health, security, character, because it is important that we bring in people who are going to be contributors to the Australian community," he said.
Canberra is also planning to spend $44 million on food, blankets and emergency supplies to directly support 240,000 people in UNHCR camps, as part of its $230 million aid program.
Meanwhile, Abbott said the country's military would soon comply with a request from U.S. President Barack Obama join coalition airstrikes against ISIS targets in Syria. It already targets ISIS in Iraq.
"I just want to stress that we are targeting Daesh (ISIS). We are targeting the death cult. That is where our strikes will be directed. We have no legal basis, at this point in time, for wider strikes in Syria and we don't intend to make wider strikes in Syria," he said.
Strikes will start within the week, according to Australian Defense Force chief Air Chief Marshal Mark Binskin.
Australia currently has six strike aircraft, a refueler and a command and control aircraft operating from the Middle East, so no extra deployments would be needed, he added.
A coalition of countries led by the U.S. have been targeting ISIS targets in Syria since last September.
Abbott suggested Britain would soon join the effort, amid a debate in that country about whether strikes should be extended from Iraq to Syria.
This week, British Prime Minister David Cameron has been forced to defend his authorization of drone strikes that killed two British ISIS militants
in Syria last month, despite a 2013 parliamentary vote against UK military action in Syria.
Flood of refugees
Millions of people have streamed across the Syrian and Iraq borders, fleeing ISIS militants who are determined to create an Islamic caliphate, as battles rage over territory between warring factions.
In the past week, European leaders have held emergency meetings to deal with the thousands of desperate migrants who are attempting to cross European borders.
Within Australia, pressure was growing on the government to do more to contribute to the global response.
Australia's record on asylum seekers is a divisive issue within the country. Abbott came to power in 2013 with a mandate to "stop the boats" -- referring to boatloads of migrants who were trying to make their way to Australian waters to seek asylum.
Abbott has boasted of his success in curbing migrant numbers, but critics say he has just pushed the problem back to sea while hiding the true numbers of lives lost by refusing to comment on "operational matters."
Asylum seekers who make it to Australian waters are detained in offshore detention centers while their claims are processed, and are threatened with repatriation if their claims fail.