Planned new laws will see passengers injured during domestic flights get more than $200,000 extra in compensation payments.

In the first increase since 1994, insurance compensation payouts for air victims will be raised from $500,000 to $725,000, according to news.com.au.

Transport Minister Anthony Albanese said the change will bring Australia up to speed with international practices, ensuring airlines move fast for a fair settlement with victims and their families involved.

The legislation for the insurance changes will be introduced by the minister to parliament this week.