The Australian government-funded immigration detention centre on Manus Island is set to close by the end of the year.
Prime Minister Malcolm Turnbull confirmed the closure during a joint press conference with Papua New Guinea Prime Minister Peter O'Neill in Port Moresby on Saturday.
"I want to thank you prime minister (O'Neill) for your government's continued cooperation in the vitally important fight against people smuggling," Mr Turnbull told reporters.
"We will continue to work together to close the regional processing centre by the end of the year."
Last April, the PNG Supreme Court found the detention centre breaches the country's constitution.
There were 861 men living at the centre as of late January, according to the most recent statistics from Australia's immigration department.
A number of refugees in limbo on Manus Island are expected to be resettled in the US, along with others stuck on Nauru.
US Homeland Security officials are expected to travel to PNG to conduct fingerprinting and security interviews in April and May.
But both leaders were tight-lipped on the fate of those who won't be selected to move to America.
"We will take this process one step at a time," Mr Turnbull said.
The immigration department last month confirmed that Australia is not in negotiations with any other third countries.
Only an estimated 15 refugees have been resettled in PNG so far.
While a small handful has been able to obtain professional jobs, many have struggled to rebuild their lives because of tribal violence and extreme poverty.
"Many of the refugees are not willing to resettle in PNG. We can not force people into a resettlement exercise if they are not willing to accept our offer," Mr O'Neill said.
The Howard government first set up a detention centre on Manus Island in 2001-2004.
It was then reopened under the Gillard government in 2012.
Nauru's President Baron Waqa was in Australia for talks with Mr Turnbull last week but the pair were vague on the time frame for the Pacific island nation's detention centre closure.
Mr Waqa did seek assurances Australia would try to stymie the economic hit the island will face once the centres shuts.
Meanwhile, the Department of Foreign Affairs and Trade has confirmed it's providing consular assistance to an Australian woman who travelled to Manus Island.
Former journalist Nikala Sim travelled to Manus Island on a tourist visa earlier this week and was arrested and detained, the ABC reported.
