Prime Minister Kevin Rudd said his Government would give $15 million to help states and territories set up the system, which will send messages to landlines and mobile phones.

Mr Rudd said the warning system, advocated by Victoria following the Victorian Black Saturday bushfires, would not be foolproof.

"But it does respresent an important step forward in providing the best possible emergency warning system in the case of future natural disasters," Mr Rudd told reporters after a Council of Australian Governments meeting in Hobart.

Victorian Treasurer John Lenders welcomed the decision to have the system up and running by the next bushfire season. He said states and territories would meet its operating costs.

Warning messages will initially send messages to landlines, and mobile phones selected by their billing address, Mr Lenders said.

Further development of the system would mean that messages could be narrow-cast to mobiles in areas where the disasters may strike.