Prime Minister Rudd's refugee announcement is Australia's day of refugee shame, Greens Leader Senator Christine Milne said.
"A rich country like Australia paying off a poor country to take our desperate refugees is passing the buck and an abrogation of our responsibilities to people and the international community," Senator Milne said.
"It's not a regional solution, but a radical, right-wing, hard-line response. Manus Island will be Australia's gulag in PNG.
"Many people will feel ashamed and disappointed at the decision to dump some of the world's most vulnerable people on one of the world's most impoverished countries.
"Once again Labor has failed to have the courage to stand up for what is right."
Greens Immigration spokesperson Senator Sarah Hanson-Young said Kevin Rudd's hard-line means a 'horrible line' for refugees.
"This is a rush to the right, a rush to refugee cruelty so that Kevin Rudd can rush to the polls," Senator Sarah Hanson-Young said.
"This heartless policy will cost Australian taxpayers billions of dollars at the expense of our values of fairness and compassion.
"Permanently resettling refugees in Papua New Guinea is no way to respond to people seeking protection.
"The government can't have it both ways. It has already said it's sending people to PNG as a cruel punishment, now it wants to say it is an appropriate place to permanently resettle refugees.
"What Mr Rudd should have announced today is commitment to a genuine regional approach that cares for refugees with the kind of political leadership shown after the Vietnam War.
"While PNG have signed the Refugee Convention, their commitment to it in practice and their capacity to implement it is fraught."