Parents who are working through the COVID-19 crisis will receive free childcare under a $1.6 billion federal government plan to keep children in care.

The federal government says it expects one million families will benefit from the temporary overhaul of the childcare system, which will begin from Sunday night.

Education Minister Dan Tehan said the plan aims to keep parents at work and childcare workers in the job.

“We want all parents who have to work through the coronavirus pandemic to be able to make sure that their children are getting the care that they expect and that they want their children to be getting,” he said.

“That’s why we’ll be moving to a different childcare system as of Sunday night. It will be a system which will mean parents will get their children cared for for free.”

The government will waive the gap fee for parents who have been paying for childcare, backdated to March 23.

The new system will see payments start flowing at the end of next week. The system will be reviewed after one month, with an extension to be considered after three months.

The payments will be paid in lieu of the Child Care and Additional Child Care Subsidy payments.

It is unclear whether all parents who used childcare services prior to the COVID-19 crisis will be able to access the free care scheme, or only the children of essential services workers.

“What we’re going to ask the centres is to prioritise,” Mr Tehan said.

“They should prioritise, obviously, those who need their children cared for because they are working, and working where they can’t care for their children safely at home.”

Together, the childcare overhaul and JobKeeper payments to childcare workers will see the sector receive an estimated $1.6 billion over three months.