Bishop said this was Australia's fourth diplomatic post in Indonesia, and "it is a demonstration of Australia's commitment to our relationship with Indonesia - a close neighbour and one of the most important and dynamic democracies in our region".
This new office is part of the Australian government's commitment to expand its diplomatic network - the single largest expansion in more than 40 years and Chris Barnes was appointed consul-general in August last year.
Barnes was most recently commissioner and regional director of the Western Australia Trade and Investment Office in Jakarta. He has also held several senior positions in the private sector and with groups promoting trade with Indonesia.
Australia's Department of Foreign Affairs and Trade said that Surabaya, Indonesia's second largest city, was an increasingly important destination for Australian trade and investment. East Java accounts for about 15% of Indonesia's GDP.
Bishop said the Surabaya consulate-general would focus on enhancing trade and building economic partnership opportunities in East Java, including in financial services, education, health, manufacturing and infrastructure.
It would also work to bolster cultural and community links with central and eastern Java, and provide consular and other services to Australians.