
Australian Prime Minister Julia Gillard is undergoing the final stages of an AU$292 million bilateral agreement with Malaysian counterpart Dato Sri Najib Tun Razak to relocate 800 asylum seekers who arrive illegally by boat away from the Australian mainland for detention and processing. In exchange Gillard will expand Australia’s humanitarian efforts by assisting in the resettling of 4,000 persons of genuine refugee status, currently living in Malaysia, over a period of 4 years.
This move by the Gillard Government stems from a meeting held by both the Australian and Malaysian leaders on March 30 at a Regional Co-Operation-themed Ministerial Conference in Bali, Indonesia. Gillard had previously tried unsuccessfully to pitch the relocation of asylum seekers to East Timor and talks about such with Papua New Guinea are ongoing, although PNG says a previously closed centre will remain closed. 
Immigration Minister Chris Bowen noted that this agreement may be controversial but, "[a]s the Prime Minister said, nobody should doubt our resolve to break the people smugglers' business model."
Opposition leader Tony Abbott says that this agreement harkens back to the original Howard Government migration policy which began in 2001 and was eventually scrapped by the Rudd Labour Government in 2007. This was known as the 'Pacific Solution' and aimed to relocate asylum seekers who illegally arrived in Australia by relocating and processing them in detention centres in the Pacific Islands of Christmas Island and Nauru.     
The UN Refugee Agency's website notes that while Malaysia hosts an estimated three million refugees and migrants from various countries it is not a signatory to the UN Refugee Convention (1951). This, it believes, will complicate the status determination of refugees.

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Australia, Malaysia closing in on refugee agreement