Defence Minister Richard Marles said a "significant number" of troops was being sent but declined to give the number. Two C-130J Super Hercules aircraft had also been deployed.
Marles, who is also deputy prime minister, would not say where the aircraft and troops would be based.
The planes will add to a C-17A Globemaster heavy transport aircraft and a KC-30 air refueller already in the area.
"The point of this is to provide support to Australian populations who are in the Middle East if this gets worse," Marles told public broadcaster ABC.
The Israel-Hamas war was triggered by an unprecedented attack on Israel launched by the Palestinian militant group on October 7 from the Gaza Strip. Thousands of civilians have been killed on both sides since the conflict began.
More than 800 Australians have been flown out of Israel since October 13.
Marles said the Australian government is trying to help 79 citizens in Gaza and 51 in the West Bank who have asked to leave.
Australia has a long history of military presence in the wider Middle East.
It contributes troops to a joint task force fighting the Islamic State group in Iraq and Syria, focusing on training Iraqi security forces.
Under a previous conservative government, Australia said in 2020 that it would focus its defence commitments on the Asia-Pacific region.
As a result, it halted annual deployments of a naval ship to the Middle East, ending a 30-year commitment to support freedom of navigation and security.
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