The program, which is designed to get more health professionals into Australia's regional and remote areas, will begin in January.
It's hoped that offering the chance to have up to $100,000 in university HELP debt paid off by the government will help fill critical job shortages in the country.
The scheme will require doctors who go to a remote area to work for half as many years as they studied to have their university debt covered.
However, nurse practitioners will only need to work in remote areas for one year to have their fees paid.
Doctors working in larger regional towns or cities will have to work in the area for the same amount of time as they spent studying.
The incentive scheme is being welcomed by existing regional doctors, who are battling current staff shortages that are forcing patients to wait for basic healthcare.
Dr Kirby White only opened her Bendigo GP clinic three months ago and she has already had to turn patients away.
"My books are now closed and I have a waitlist of over 150 long," she said.
"There are many clinics now that have a wait time up to three weeks to see a GP.
"And if you go further out into remote areas of Australia, the wait can be up to four weeks."