Prime Minister Anthony Albanese and the seven state and territory leaders agreed to the age restriction in a national cabinet meeting on Friday.
Tasmania pushed for a lower limit of 14 years but agreed to go along with the rest of the nation for the sake of uniformity.
"Social media is doing social harm to our young Australians and I am calling time on it," Mr Albanese told reporters after the meeting.
The prime minister likened the move to "successful" bans on mobile phones in schools by the states and territories.
"Kids are playing with each other at lunchtime, instead of playing on their phones. That's a good thing," he said.
The government will introduce the legislation to parliament next sitting week and, with the coalition having previously flagged support, could see it passed before the year is out.
The ban will come into effect 12 months later to give the industry, governments and the eSafety Commissioner time to implement it effectively.
A trial of age verification and assurance technologies is currently under way and due to be completed in the first half of 2025.
The point of the legislation is to protect young people so it will also have strong privacy provisions, Communications Minister Michelle Rowland said.
"I want to make it very clear to the Australian people that the utmost support needs to be given to young people through the implementation of these measures," she said.
The limit is to protect children, Minister Michelle Rowland and Prime Minister Anthony Albanese say. (Mick Tsikas/AAP PHOTOS)
Tech giants are wary of a social media age limit, saying it shouldn't be up to them to enforce the rules but rather app stores to ensure safety across the board.
Meta, the parent company of Facebook and Instagram, argues against putting the onus on social media companies to enforce the proposed age limit, saying the technology for a perfect solution "isn't quite there yet".
Parents and young people would carry the burden if each app needed to implement its own age controls, Meta's Australia and New Zealand policy director Mia Garlick said.
"We completely agree that there needs to be age-appropriate experiences for young people on services like the ones we provide," she told ABC Radio on Friday.
"The challenge is, the technology isn't quite there yet in terms of having a perfect solution."
Ms Garlick defended accusations the tech giant was trying to pass the buck and protect profits, saying Meta already implemented safety controls such as asking people their age at sign-up and using artificial intelligence to detect if their age appears different.
Meta policy director Mia Garlick (left) argues against putting the onus on social media companies. (Lukas Coch/AAP PHOTOS)
Social media was a driver of risky behaviour for children and has led to deaths after attempts to copy viral challenges, researcher Samuel Cornell told AAP.
"I don't think it's a perfect solution, but harm is being caused to children and young people," he said of the proposed age limit.
Platforms play a critical role in young people engaging with education, potential employers, health services and personal networks of people with shared interests, RMIT information sciences professor Lisa Given said.
"They may be grappling with many different issues in their lives, without access to appropriate supports at home or in their communities," she said.
Ms Rowland said exemptions could be made for educational and health platforms, such as YouTube Kids.
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