Labor will lift foreign aid every year if it wins the next election, with the eventual goal to more than double it from the lowest level in Australia's history.
The coalition government slashed the growth rate of foreign aid funding, opening the door for other nations to offer controversial loans to neighbouring Pacific countries.
At Labor's national conference in Adelaide on Tuesday, factions agreed to incrementally lift the foreign aid budget to 0.5 per cent of gross national income.
It is currently at 0.22 per cent.
Labor's foreign affairs spokeswoman Penny Wong said unprecedented cuts to the aid budget had harmed some of the world's poorest people.
"Labor believes Australia should do its fair share internationally," Senator Wong.
"We all believe Australia can show humanity, decency and compassion because we believe in a fair go for all at home, on our doorstep and abroad."
The party will also call on a Shorten Labor government to officially recognise Palestine.
The conference passed a motion supporting the recognition and right of Israel and Palestine to exist as two states within secure and recognised borders.
"We recognise that a just two-state resolution will require recognising the right of both the Israeli and Palestinian peoples to live in peace and security," Senator Wong said.
But the decision will be based on the advice of foreign policy experts, and will be left to a future Labor cabinet.
Prime Minister Scott Morrison last week announced Australia will recognise West Jerusalem as Israel's capital, once a two-state solution with Palestine is agreed.
"He made a decision to junk longstanding bipartisan foreign policy in a cynical attempt to win votes," Senator Wong said.
Labor resolved to sign and ratify the United Nations' nuclear weapon ban treaty after working to achieve universal support for it, and ensuring there is effective verification other nations are complying.
"Labor will act with urgency to reduce the risk of nuclear war and to rid the world of nuclear weapons," Senator Wong said.
