The federal government has announced $188.5 million will be provided over four years on expanded intelligence gathering, investigations and seizure operations undertaken by the ABF, including the use of artificial intelligence to enhance the detection and disruption of illicit tobacco syndicates and networks.

"Illegal cigarettes ... are an ATM for the illegal activities of organised crime," Health Minister Mark Butler said. "They are helping fund activities like drug trafficking and sex trafficking".

ABF Commissioner Michael Outram said the funding would "enhance and modernise our ability to stop illicit tobacco at the border and before it ever reaches our shores".

"There are well-document links between the distribution and sale of illicit tobacco products in Australia and serious and organised crime," the government said. "Organised crime syndicates are known to target tobacco retailers to buy and sell illicit tobacco."

The move follows the decision last year to significantly increase the excise and customs duty on tobacco products, raising an extra $3.3 billion in revenue over four years.

Tobacco companies warned at the time that the decision would spur trade in illegal tobacco.

But Treasurer Jim Chalmers was unapologetic. "Illegal tobacco is more than a problem for the budget. It's a health challenge and it's a challenge to our border security," Dr Chalmers said.

Immigration Minister Andrew Giles said the ABF was "our first line of defence" against the illicit tobacco trade.

The crackdown follows the government's move to tightly regulate the importation and sale of vapes, including a ban on the importation of single use vapes that came into effect on January 1 and, from March 1, prohibitions on personal importation.