Defence Industry Minister Pat Conroy confirmed Australia would send a representative to an emergency summit in Paris held jointly by the UK and France designed to find a solution to open the strait to traffic.
A decision is yet to be made as to who would represent Australia at the summit, or whether attendance would be in-person or virtually.
"We're still resolving that at the moment. Typically in these things, we send a military officer, but it could be a diplomatic representative," Mr Conroy told ABC Radio on Tuesday.
"The key thing is is that the coalition of nations that are really keen to see a diplomatic resolution of the conflict and for the strait to be reopened via diplomatic means so that we can get ships moving through this vital waterway."
The strait has one-fifth of the world's oil supply go through it, with its closure leading to increase in fuel prices.
Peace talks between the US and Iran failed to get an agreement, with the US later announcing a naval blockade of the strait.
US President Donald Trump warned any Iranian ships approaching the blockade would be destroyed.
Defence Minister Richard Marles said the federal government wanted the strait reopened as soon as possible.
"We are working with all of our partners around efforts that are being taken forward in respect of the Strait of Hormuz and how Australia can best contribute," he told ABC Radio.
"We really need to see what plays out throughout the remainder of the ceasefire and as to what the circumstances are in the Strait of Hormuz, which would allow some effort to begin."
Mr Conroy said peace was needed in the region before the strait could be reopened to naval traffic.
"That's why we need Iran and the United States to continue the ceasefire, return to negotiations so that the strait can be reopened."
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