UPDATED 3.00pm: Tony Abbott has just confirmed Australia will send 300 additional troops to Iraq.

They will join a New Zealand force training Iraqi soldiers. 

Earlier, Sky News confirmed the deployment will be part of a joint mission with 140 New Zealand troops.

Liberal Senator Mathias Cormann told Sky News working with New Zealand makes sense.

"It's obviously an evolving situation."

"We continue to be engaged in regular conversations with our friends and allies around the world and also with the Iraqi government."

The deployment could see up to 300 extra troops join the fight against Islamic State.