Drought Minister David Littleproud has ruled out spending cash from a $5 billion fund any sooner than mid-2020.
The Future Drought Fund, which cleared the Senate on Wednesday, is slated to pay out $100 million a year for projects guarding against the effects of future dry spells.
The fund is not aimed at dealing with the immediate crisis sweeping eastern and southern Australia.
Labor has been critical the money will not be rolled out until July 1 next year, despite going on to support the bill in parliament.
Mr Littleproud said he needs that time to ensure there is enough consultation on how the fund will be deployed.
"I'm putting in place accountability measures to make sure that we can give confidence to the Australian taxpayer that the money isn't being misused," he told reporters in Canberra on Thursday.
The minister needs to consult on the fund for 42 days under legislation and it will also be guided by an expert panel.
"I've got to piece all that together, so the practical application is you just don't go throwing out $100 million every year at a whim. You've got to have due process," Mr Littleproud said.
The fund will initially be worth $3.9 billion and is projected to rise to $5 billion over the next decade.
The money is intended to support drought resilience including investment in research and innovation, adoption of new technology and improved environmental management.
Water-saving infrastructure and other community initiatives and projects are also in line for funding.
Legislation passed the Senate on Wednesday with a Centre Alliance amendment ensuring the committee advising the minister about grants has diverse membership.
The government supported the SA-based minor party's push for a balance of gender, knowledge and skills, along with representatives from different drought-hit regions.
After initially opposing the bill because it drew money from a dormant fund for road and rail, Labor backed down and supported its passage through both chambers of parliament.
The bill will now return to the lower house to be ticked off before becoming law.
Australian Associated Press