Indonesia is to make it harder for people from Iran to enter the country in order to travel to Australia by boat.
Justice minister Amir Syamsuddin has signed a letter - in effect a ministerial decree - that will stop Iranians being able to obtain a visa on arrival when they fly to Indonesia.
The ABC reports the move could slow the flow of people on their way to seeking asylum in Australia.
Mr Syamsuddin confirmed the visa changes were made following a request from Prime Minister Kevin Rudd last week.
It is not yet known when the restriction will take effect.
At the end of June, 12% of people registered with the UN refugee agency in Indonesia were from Iran.
The ABC reports Indonesia's visa system allows citizens from more than 60 countries to arrive in the country, pay a $US25 fee, and receive a visa for 30 days. Indonesia is a transit destination.
Earlier this month, President Susilo Bambang Yudhoyono and Mr Rudd announced a regional conference to discuss people smuggling.
The Australian Navy rescued another 120 asylum seekers after their boat got into trouble near Christmas Island on Wednesday night.
Four people drowned when their boat capsized in rough seas on Tuesday.