Prime Minister Scott Morrison announced on Wednesday, intentions to cap national migration at 160,000 over the next four years.

The decision will translate to at least 30,000 fewer new arrivals.

But, the federal government has also revealed, that the revised policy will emphasis bringing more migrants out of the cities and into the regions.

"If it encourages a higher percentage of migrants to rural and regional places, then that's a positive for the city and I'm happy to hear it," said Wagga mayor Greg Conkey.

"But I'm disappointed the number has been cut. We are a rich country, and the way I see it is there's no reason why those numbers couldn't be kept up."

With ambitions to reach a population of more than 100,000 in the next two decades, the mayor is concerned this national policy will present something of a spanner in the works.

"About 60 per cent of our growth over the past five years has come through people who are born overseas," he said.

"We are a very multicultural city, and migration will play a big role in helping us reach that population goal.

"We can absorb a number [of migrants] already, but in order to get to our goal, we're going to need support from the federal government to bring up our infrastructure."

For the 23,000 new entrants who are brought into the country on certain skilled migration VISAs, a new caveat will exist on their applications.

They will have to spend a minimum of three years in the regions before they may be granted passage to the cities. It represents an additional year on the previous policy.

Wagga's CEO of Regional Development Australia, Rachel Whiting has questioned whether this will make much of a difference on the coal face.

"It's not really about us, it's about what the employers in our regions are needing and what they're telling us is that they desperately need more skilled workers," said Ms Whiting.

"We would like more skilled migrants to fit our skills shortage. We need a greater allocation to our regions.

"For the VISAs that we are certified to sponsor, last year we were given only 100 skilled migrants. Businesses in this region were telling us they could have done with at least double that, and what we're hearing from both sides is that this needs to be a pathway for long-term migration."

The prime minister also announced on Wednesday plans to develop further incentives for international students to live and study on regional campuses. 

Scholarships of up to $15,000 will be made available for overseas students to study on non-city based campuses. 

It is a measure that has been welcomed by the mayor.

"We have the largest CSU campus within the network, we would expect this would mean we're to pick up quite a few more students," said Cr Conkey.

"These people will be ambassadors for our city when they return home, and we would like them to be able to share their skills, knowledge and culture with us for as long as they're with us."