The plan has provoked a wrath of criticism from industry and privacy groups, who previously attacked the scheme when it was announced in January.
Conroy said ISP content filtering will be part of a wider plan to fight child pornography, including $49 million to aid Australian Federal Police law enforcement.
"The Internet has exposed [children] to continually emerging and evolving dangers that did not previously exist," Conroy said.
"While there may be technical and cost hurdles [for content filtering], the message from other countries is that these can be overcome.
"Cyber-safety means helping parents and teachers as well as educating children to be good cyber-citizens."
Electronic Frontiers Association chair Dale Clapperton said the government should do more research into the feasibility of content filtering before allocating funds.
"We are disappointed that the appropriation of money seems to prejudge the question of whether it is feasible to implement content filtering," Clapperton said.
"We need more details on what the government is actually proposing to do so we can engage in informed dialog."
NSW Council of Civil Liberties president Cameron Murphy said the scheme is a token gesture and will do more damage to freedoms than restrict child pornography.
"This is the way China goes about stopping its people reading illicit material and by substance of the proposal, Senator Conroy is the same," Murphy said.
"Parents need to take more responsibility for what their children view.
"There is no proper classification process for this kind of content blocking. The technology is not up to it, whether it is linguistic-based or Web site-based."
The opt-out plan requires all ISPs to filter "objectionable material" from Internet traffic according to a blacklist defined by the Australian Communications and Media Authority (ACMA).
Industry professionals and privacy groups rebutted the scheme, claiming it is technically impossible and economically infeasible to implement, police and maintain ISP-level content filtering.
The funds will be allocated over four years, and will precede a trial of content filtering technology by the Australian Communications and Media Authority (ACMA).
The trial will be the second attempt at piloting content filtering technology. The first instance, run under the Howard government, failed to gain traction when the RFT went unanswered and the trial was aborted.
The government will close the former government's NetAlert content filtering initiative in December, claiming 80 percent of users which install the software did not continue to use it.
"[NetAlert] funding will be redirected to support ISPs making available a filtered Internet service, or 'clean feed', to all homes, schools and public Internet points accessible to children," Conroy said.
Conroy pointed to European nations which have attacked child pornography with content filters and Internet blacklists.