PNGTPA chief executive officer Eric Mossman said it was an effort to grow domestic tourism when the deal was signed with Air Niugini commercial general manager Paul Abbot in Port Moresby.
Of the total, K250,000 will go towards promotions in the domestic market while the other K250,000 will be used to support and promote the inbound Australian tourism market.
"Covid-19 brought travel and tourism to a standstill over the last two years, however with the restrictions being slowly lifted and more people now travelling, we hope they can make use of the domestic travel subsidies being offered," Mossman said.
"Air Niugini, as one of our leading industry partners provides a wide range of tour packages, we therefore encourage people to make use of the subsidies by buying domestic tour packages from Air Niugini, which in turn will boost domestic tourism."
Abbot said Air Niugini would ensure domestic packages were more accessible in order to stimulate more demand and support the domestic tourism operators.
"We hope to make domestic tourism more accessible and easier for everyone to be able to take advantage of the many and varied tourism experiences in our beautiful country. The flow on effect from people traveling and staying domestically will have a positive impact on communities all over the country," Abbot said.