According to reports the government believes there are more than 260,000 illegal guns in the community.
Mr Keenan said the amnesty would allow people to hand in guns with no questions asked.
Illegal gun owners in Australia will be given three months to hand in their weapons, with no questions asked, due to the increased number of gun-related crimes and the threat of terrorism..
Meanwhile, Justice Minister Michael Keenan is expected to announce details today of the three-month crackdown which will kick-off on July 1.
"There does appear to have been a proliferation of illicit guns over time, but remember there used to be a lot of guns in Australia until we've had very strict gun laws that were instituted after the Port Arthur massacre in 1996".
This is the first national gun amnesty since the Port Arthur massacre in Tasmania, which resulted in 35 people killed in 1996, prompting the purchase of nearly 700,000 illegal weapons as part of the gun control laws enacted after the tragedy.
'The fact [is] we've got a deteriorating national security environment, ' Mr Keenan told ABC radio.
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"The danger there is that there might be a circumstance where the wrong person - a criminal, a terrorist - might get their hands on those guns".
"We have seen, through terror attacks in Australia, that illegal guns have been used", Mr Keenan said.
Fellow cabinet minister Christopher Pyne said if illegal guns weren't in the system they couldn't be used to kill the likes of Queensland police officer Brett Forte recently.
'We would certainly encourage people to do the right thing and to hand them in, ' frontbencher Anthony Albanese told the Nine Network.
The Port Arthur shooting in April 1996 resulted in the deaths of 35 people at the popular tourist site in Tasmania.
The gunman, Martin Bryant, was given 35 life sentences.