The funding, through the Department of Education and Training, will be provided as $69.2 million in 2017-18 and $800,000 in 2018-19.
Chair of the NCI Board, Emeritus Professor Michael Barber, said NCI was crucial to Australia's future research needs.
"This announcement is very welcome. NCI plays a pivotal role in the national research landscape, and the supercomputer is the centrepiece of NCI's renowned and tightly integrated, high-performance computing and data environment", he stated. "The Government's announcement is incredibly important for the national research endeavour. It means NCI can continue to provide Australian researchers with a world-class advanced computing environment that is a fusion of powerful computing, high-performance 'Big Data', and world-leading expertise that enables cutting-edge Australian research and innovation."
"The NCI supercomputer is one of the most important pieces of research infrastructure in Australia. It is critical to the competitiveness of Australian research and development in every field of scientific and technological endeavour, spanning the national science and research priorities."
ANU Vice-Chancellor Professor Brian Schmidt said the funding would ensure NCI remains at the centre of Australia's research needs.
"The new NCI supercomputer will be a valuable tool for Australian researchers and industry, and will be central to scientific developments in medical research, climate and weather, engineering and all fields that require analysis of so-called big data, including, of course, astronomy", Professor Schmidt stated.
The announcement of funding ensures researchers in 40 universities, five national science agencies, three medical research institutes, and industry will benefit from a boost in computational horsepower, enabling new research that is more ambitious and more innovative than ever before once the new supercomputer is commissioned in early 2019.
NCI anticipates the resulting supercomputer will be ranked in the top 25 internationally.
The Australian Government's 2016 National Research Infrastructure Roadmap specifically recognised the critical importance of such a resource, and the need for an urgent upgrade.
The new supercomputer will ensure NCI can continue to provide essential support for research funded and sustained by the national research councils - the Australian Research Council and the National Health and Medical Research Council, and the national science agencies - notably CSIRO, the Bureau of Meteorology and Geoscience Australia.
This research will drive innovation that is critical to Australia's future economic development and the wellbeing of Australians.