The payment will go towards severely bushfire impacted councils across the nation to help quickly rebuild vital infrastructure and strengthen community resilience.

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Wingecarribee Shire Council mayor Duncan Gair said that the money was timely in assisting the community affected by the bushfires.

"The funding is really good, I've been advocating for funding for some time," he said.

"It is something that I believe all councils across the state will be grateful for.

"There's no red tape, no criteria and no waiting for the funding. As soon as we identify a project in relation to bushfire activity we can act on it.

"Council staff have been shortlisting vert urgent suggestions and requests.

"The money will help council so much."

A further $18 million will be set aside to provide additional support to larger council areas which have experienced the most significant damage, with the National Bushfire Recovery Coordinator Andrew Colvin working with state governments and impacted local councils on determining this additional allocation.

Prime Minister Scott Morrison said his Government was committed to working hand in hand with regional communities to rebuild towns and villages.

"These payments will provide immediate assistance directly into the hands of local councils to rebuild roads and infrastructure, employ staff to help in recovery activities and hold events which bring the community together and bring tourists back to town," the Prime Minister said.

"We are moving immediately to support local councils and our funding will be in state government bank accounts by tomorrow.

"Importantly this is a base payment and just the start of our support for local communities, in what we know will be a long recovery."

Funding will be directed to councils which have been 'activated' by their respective state government for Category C bushfire disaster recovery relief under the Disaster Recovery Funding Arrangements (DRFA). Payments will not require matched funding from state governments.

Currently there are 40 councils across Australia in receipt of Category C assistance, including 33 in New South Wales, five in Queensland and two in South Australia (list attached).

Funding will also be provided to the Local Government Areas of East Gippsland and Towong in Victoria in recognition of an imminent request from the Victorian Government for Category C assistance for these severely impacted regions.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the Government was backing regional communities to rebuild and recover.

"We have always known regional communities are Australia's most resilient and in the devastation of these fires we have seen again the remarkable community spirit existing in our regions, said the Deputy Prime Minister.

"The immediate payments to councils will boost affected economies by supporting local small businesses, farmers and trades as they rebuild, restock, replant and recover."

Minister for Natural Disaster and Emergency Management David Littleproud said the focus would be on supporting local communities.

"I've made it clear this won't be a Canberra led recovery, it'll be a locally led recovery and this is our first instalment in that process. We're empowering local governments to be part of that process today. We're committed to rebuilding communities but also the lives of those impacted by these devastating fires," Minister Littleproud said.

All funds will be drawn from the $2 billion allocated to the National Bushfire Recovery Agency and this is in addition to funding that is automatically available to councils through other disaster recovery arrangements.

The lump sum payments will be delivered by the Commonwealth by the close of business tomorrow to State Governments who administer payments to councils.

The only condition placed on councils is that they develop a Program of Works within three months and report back to the Commonwealth in 12 months' time.

Councils will be able to spend their $1 million payments on projects and activities that they deem essential for the recovery and renewal of their communities, including: