SYDNEY, Sept 4, 2025 (BSS/AFP) - Australia will pay US$1.6 billion to the tiny Pacific nation of Nauru over the next three decades to send hundreds of immigrants to the barren island under a secretive new deal, officials said.

Both governments signed a secretive deal last week under which Nauru will resettle up to 354 people who have no legal right to stay in Australia in exchange for an initial Aus$408 million payment (US$267 million) and about Aus$70 million yearly thereafter.

In a late-night parliamentary hearing Wednesday, home affairs officials confirmed the annual payments could continue for 30 years, leaving Australia with a Aus$2.5 billion (US$1.6 billion) bill.

It is the first time financial details of the deal have been aired.

"It's in both nations' interest to move through this as efficiently as we can," Clare Sharp, head of immigration from the Department of Home Affairs said.

"It's in Nauru's interest, because money doesn't flow until people arrive," she said.

Nauru, population 12,500, is one of the world's smallest countries, with a mainland measuring just 20 square kilometres (7.7 square miles).

It is especially vulnerable to climate change and has high rates of unemployment and health issues, a recent World Bank assessment said.

Unusually pure phosphate deposits -- a key ingredient in fertiliser -- once made Nauru one of the wealthiest places, per capita, on the planet.

But those supplies have long dried up, and researchers today estimate 80 percent of Nauru has been rendered uninhabitable by mining.

Under the migrant deal, money will be split between the Nauru government and a joint trust managed with Australia -- with claw-back provisions being finalized should parts of the deal not be delivered.

The island nation will also collect the interest generated by the trust, with the principal paid out in 2055.

There are no guarantees all 354 people -- including some convicted of serious crimes -- will be deported to Nauru, with the Pacific island making the final decision, Australian immigration officials said.

Canberra will also pay a $1,000 fee for each visa application.

Australia's government has struggled to find a way to deal with immigrants who have no other country to go to when their visas are cancelled.

The High Court ruled in 2023 that indefinite detention was unlawful if deportation was not an option, leading to the release of 220 people.

The number of immigrants in that situation now numbers 354, government officials said.

In February, Australia paid an undisclosed sum for Nauru to accept three immigrants convicted of violent offences, though legal challenges have reportedly stalled their transfer.

Last year, Australia and Nauru signed an agreement spanning maritime security, defence and policing.