Prime Minister Tony Abbott will mark Father's Day by announcing an extra $4.5 million for the program.

Funding under the government's shed development grants program had been due to run out in June next year. But Mr Abbott's announcement means the money will continue to flow until at least 2019.

"It's a win for the sheds, the men who use them and the communities that benefit from them," Mr Abbott said.

"Men's Sheds reduce social isolation, particularly for older men and people living in rural and remote areas. This funding reflects our commitment to promoting and supporting men's health."

Men's Sheds have become an important part of many Australian communities, serving as meeting places where men can find social support and camaraderie. The government believes they are an important contributor to the mental health and physical wellbeing of men, particularly those who live in remote or disadvantaged areas.

There are now 800 men's sheds across the country, with more springing up all the time.

The government's National Shed Development Program provides competitive grants of up to $8000 to allow local Men's Sheds to maintain their space, buy new tools or start new projects.

Defence veterans, men suffering from alcohol or drug abuse, and men who need support due to relationship issues are given priority under the program's latest guidelines.