Papua New Guinea announced Wednesday that Australia has agreed to close the Manus Island detention centre, more than three months after PNG's Supreme Court found it was unconstitutional.

However, Immigration Minister Peter Dutton says his government always intended to shut the facility, hosing down any suggestion the closure was imminent.

Mr O'Neill said he met Mr Dutton in Port Moresby and "both Papua New Guinea and Australia are in agreement that the centre is to be closed."

However no detail was provided on how the closure would be implemented and where about 850 men detained on Manus will be moved to, given the Turnbull government has failed to devise a third country resettlement option.

Mr O'Neill had previously said the centre would close as a result of the court ruling. It triggered a standoff with Mr Dutton, who said in April that Australia has paid PNG "a lot of money" to host the centre and the men are the responsibility of that nation.

In a statement on Wednesday Mr Dutton said his government had a "longstanding position" to work with PNG to close the detention centre "and support those people as they transition into PNG or return to their country of origin".

"Our position, confirmed again today with PNG, is that no one from Manus Island Regional Processing Centre will ever be settled in Australia.

"In addition to the removal of all children from detention and the closure of 17 detention centres, this is a further dividend of the Coalition's strong and consistent border protection policies."

Mr Dutton said the Rudd Labor Government struck a deal with PNG to establish the Manus facility "at a time when Labor lost control of our borders and tens of thousands of people were coming on boats".

Labor contends that the Manus centre was only ever intended to be a temporary solution.

Several asylum seekers sent to Manus Island have died – one murdered during riots that swept through the detention centre, one from septicaemia after cutting his foot and another who drowned at a waterfall.

A long-awaited plan to resettle refugees elsewhere in PNG has largely failed to materialise.

Following the meeting with Mr Dutton, Mr O'Neill said "a series of options [to close the centre] are being advanced and implemented. It is important that this process is not rushed but carried out in a careful manner."

"This must take into account the interests of the people of Papua New Guinea and the wellbeing of asylum seekers and refugees," he said.

Speaking on 2GB on Wednesday, Mr Dutton said the government's success in "stopping boats" meant Manus could eventually close. But he insisted Nauru would remain open as a deterrent to people smugglers.

Greens senator Sarah Hanson-Young said "offshore detention's time is over".

"Manus has to close, Nauru is in meltdown and offshore detention is in freefall. These men have been put through enough. They were dumped on the island, attacked, ignored and then neglected for over three years."

She called on the government to bring the men to Australia.

Human Rights Watch Australia director Elaine Pearson said the detainees should "immediately be moved to Australia or a safe third country".

"Nearly a thousand men on Manus have already lost three or more years of their lives locked up in limbo for no good reason. They've endured dirty, cramped conditions, inadequate medical care and violence. Finally, it is time to let them move on with their lives in safety and dignity," she said.

with Georgina Mitchell