Gillard said a regional processing centre would "wreck" the people-smuggling trade that brings dozens of rickety boats to Australia's north, but denied reviving the hardline "Pacific Solution" of ex-prime minister John Howard.
"The purpose would be to ensure that people-smugglers have no product to sell.
Arriving by boat would just be a ticket back to the regional processing centre," the prime minister told the Lowy Institute think-tank in Sydney.
Gillard, who ousted Kevin Rudd in a party coup last month and is facing national polls this year, also ended a three-month freeze on processing Sri Lankan asylum-seekers and said a bar on Afghan claims was under review.
She said the planned new centre, which has initial support from East Timor and New Zealand, would slash the number of poor migrants who have caused headaches for successive governments.
The aim is to "wreck the people-smuggling trade by removing the incentive for boats to leave their port of origin in the first place; to