“Those veterans and all serving men and women protect our community and our freedoms. It is our duty to do the same for them.”
The Prime Minister’s decision comes after Opposition Leader Anthony Albanese backed calls for a commission.
Mr Albanese endorsed the public campaign after meeting with Julie-Ann Finney, whose son David died by suicide earlier this year.
The suicide rate for ex-servicemen is 18 per cent higher than the broader population and ex-servicewomen are twice as likely to take their own lives than other Australian women.
The government will spend $40 million to set up the office of the commissioner but would provide more funding if needed.
Apart from investigating past and new deaths, the commissioner will also make recommendations to improve mental health and wellbeing.
The watchdog will deliver an annual report to parliament to assess the reduction of suicide risk factors.
“It’s all about being permanently vigilant about their welfare,” Mr Morrison said.
The government will also establish a Veteran Family Advocate alongside the new commissioner role to communicate with veterans and their families and help develop related policy.