PM Tony Abbott said that `a much larger` area of the ocean floor would now be targeted.
But he said it was `highly unlikely` any surface wreckage would be found, and suspended aerial searches.
Malaysia Airlines flight MH370 went missing on 8 March as it flew from Kuala Lumpur to Beijing.
The plane, carrying 239 people, disappeared off radar over the South China Sea.
Officials say that, based on satellite information, they believe it ended its journey in seas north-west of the Australian city of Perth, far from its planned path.
Investigators have given no reason yet as to why the plane flew so far off course. Finding the `black box` flight recorders is seen as key to understanding what happened.
Mr Abbott made his announcement at a news conference in Canberra.
`It is now 52 days since Malaysia Airlines Fight MH370 disappeared and I`m here to inform you that the search will be entering a new phase,` he said.
By now, he said, most debris would have become water logged and sunk, so operations would now focus on `searching the ocean floor over a much larger area`.
So far, a robot submersible called the Bluefin-21 has been scouring the seabed in the location of acoustic signals heard on 8 April believed to have originated from the plane`s flight recorders.
Bluefin-21 has been searching a circular area with a 10-km (6-mile) radius, some 4,500m below the surface.
Planes and ships from multiple nations have also been searching the sea for signs of debris, based on where it might have floated from the possible impact point.
So far, however, no sign of the missing plane has been detected.
Mr Abbott said there was still `a considerable degree of confidence that the detections that were picked up` in early April were from a flight recorder.
He said the new phase of the search would involve commercial contractors with additional sonar mapping equipment - an operation towards which Australia would be seeking contributions from other countries to help meet the estimated $60m (£36m) cost.
Getting this equipment in place could take several weeks, he said, and in the interim the Bluefin-21 would continue to search.
Mr Abbott also promised that while the operation was changing, `it certainly is not ending`.
`We will do everything we humanly can... to solve this mystery,` he said.
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