The new Embassy complex will be built on a 40,500 square metre site in Jakarta's Patra Kuningan area and will be Australia`s largest Embassy complex anywhere in the world.
"The scale of the project underscores Australia's enduring interests in our partnership with Indonesia," said Greg Moriarty, Australia`s Ambassador to Indonesia.
"We would like to thank the Indonesian government and in particular the Jakarta Provincial Government, for their generous support of this project."
"We welcome the expertise of Leighton Contractors and Total Bangun Persada, which will bring the best methods, technologies and skills to realise this project," Ambassador Moriarty said.
The design of the new Embassy chancery will be a creation of well-known Australian architects Denton Corker Marshall and engineers Aurecon Australia.
It will combine functionality, a high degree of environmental awareness and the highest standards of safety and security for staff, residents and visitors.
Construction work will start immediately and is scheduled to be completed by the middle of 2015.
Construction will stimulate Jakarta`s economy and most of the specialist sub-contractors and major suppliers will be Indonesian companies.
Much of the construction material and plant and equipment will be purchased locally.
At the peak of construction activity, up to 800 Indonesian workers are expected to be on site, providing a major boost to local employment.