Foreign Minister Julie Bishop says she made the offer of additional assistance to the Philippines when she met with President Rodrigo Duterte in Manila earlier this month.
She said the Turnbull government would not be committing troops to engage in combat roles on the ground.
“We would be ready to support the Philippines in the same way we are supporting Iraq in advising, assisting and training,” Ms Bishop told reporters in Canberra.
“We've offered to assist in any way that might add to the likelihood of defeating this scourge in southern Philippines.”
Two Australian surveillance planes have already been assisting the Philippines military in Marawi.
The foreign minister said Mr Duterte has not yet responded to the offer or identified what support is required.
Australia joins a host of other nations offering support including Indonesia, Malaysia, Singapore and the United States over concerns about the presence of Islamic State militants in civilian parts of Marawi.
“The fact that ISIS now has a presence in southern Philippines is deeply concerning, not only for the Philippines but for the region,” she said.
“It's a very dangerous fight but Australia has already offered, and is supplying support to Philippines, and we stand ready to assist should they require more, as does the United States.”
Shadow Foreign Minister Penny Wong said the conflict shows the fight against terrorism is right here in our region.
“It is absolutely in our national interest and in the interest of regional security for this threat and this insurrection to be confronted and defeated," Ms Wong said on ABC Radio.
"Obviously Australia should continue to assist in the ways that the Philippines government wishes us to because it’s in our national interest to do so.”
