"We're here to work with our Pacific partners to confront the potential challenges they face in the years ahead", the PM said in a statement.
The A$500 million is to be handed out over a period of five years, beginning in 2020 to help the Pacific island nations invest in renewable energy and "climate and disaster resilience".
High-level representatives from the likes of Tuvalu, Palau and Vanuatu have criticised Australia for not doing enough, with Fiji's Frank Bainimarama saying Canberra's reliance on coal poses an "existential threat" to low-lying islands.
"Australia meets its commitments, and we will always meet our commitments", Morrison said on Tuesday when asked how he reconciled the environmental aid package with the Adani mine approval.
Le Mesurier said this week's leaders' meeting was the first since the Intergovernmental Panel on Climate Change's landmark report on limiting warming to 1.5C, which laid out the severe consequences of failing to limit warming to 1.5C and the scale and pace of global action necessary to achieve this goal, including that global emissions must be roughly halved over the next decade and reach zero before the mid-century.
Australia's Minister for International Development and the Pacific, Alex Hawk has stated their climate solution package will see their dependence on coal reduce and they're looking at various sources of renewable energy.
"Australia needs to do more", said Claire Anterea, a climate activist based in Kiribati, one of the small island states most at risk due to rising sea levels.
While prominent as the most senior member of the Australian delegation so far, Mr Hawke has appeared to be on the periphery of some informal discussions between prime ministers and presidents.
Marise Payne, the Minister for Foreign Affairs, said on Tuesday that the new package aligned with Morrison's Pacific step-up, an initiative aimed at increasing Australia's presence in the region.
The PIF leaders meeting is expected to issue a consensus statement on climate change that will then form part of the United Nation's Climate Action Forum in NY next month.
The smaller Pacific states have been negotiating their own statement on climate change, with the hope of manoeuvring Australia into supporting a strong PIF statement to take to NY.
Whilst Australia's renewed focus on the Pacific has been welcomed, it has also given Pacific countries leverage in their demands.
Other countries from further overseas are seeking closer relations with the Pacific, with both Norway and Chile applying to become dialogue partners.