The government's plan to restrict the number of international students able to enrol from the start of next year appears doomed, with the Coalition and the Greens set to vote against the contentious bill.

Labor hoped to bring temporary migration numbers back to pre-pandemic levels and crack down on dodgy education providers by limiting the number of international students able to start study in Australia to 270,000 next year.

But with just two weeks of parliament left before the January 1 start date, the Coalition said it would oppose the "chaotic and confused" bill that would give the education minister the power to set international student caps.

"The proposed cap in the education bill before parliament will not even touch the sides of this problem," the Coalition's education spokesperson Sarah Henderson, Home Affairs spokesperson James Paterson, and Immigration spokesperson Dan Tehan said in a joint statement on Monday.

"We cannot support measures which will only serve to compound this crisis of the government's making."

Both major parties have said they want to see a lower Net Overseas Migration, which includes international students. The government said it expects the figure to be 260,000 over the financial year, while Opposition Leader Peter Dutton said his party would aim for "about 160,000".

Education Minister Jason Clare told reporters on Monday that the Coalition's decision to block the bill will destroy Mr Dutton's credibility when it comes to migration.

"Never in my life did I expect to see Peter Dutton in bed with the Greens over migration," he said.

"You can't talk tough on immigration and then go soft on this."

Mr Dutton has previously said he would work with universities to set a limit on foreign students to relieve stress on the rental market.

The Greens have long opposed the bill, which higher education spokesperson Mehreen Faruqi described as "a migration bill disguised as education policy".

"Labor's reckless and chaotic international student caps are finally dead in the water as they should be. This was the very definition of how not to make policy," she said in a statement.

If the bill does not pass the parliament by the end of this month, a controversial regulation known as Ministerial Direction 107 will remain in place.

The direction, which has been in place since December, requires immigration officials to prioritise applications for students with offers from institutions considered lower risk.

In practice, it has meant bigger, more prestigious universities have been able to enrol more international students, while smaller, regional universities have been left worse off.

The sector has long been critical of Ministerial Direction 107, which it says has already led to tens of thousands fewer higher education visa applications this year.

Luke Sheehy, the chief executive of Universities Australia, said the confirmation that the direction would remain in place meant the "war on the international education sector in this country will continue".

"Blaming international students on the housing issue and migration is just plain wrong," he said.

"In an election year, both sides of politics need to ask themselves do they want to invest in the future, or do they want to continue this phoney war right through to an election?"

Mr Clare has repeatedly described the direction as a "de facto limit setter", which would be scrapped if the bill to allow individual caps was passed.

With the bill still before parliament, some universities have proceeded with 2025 enrolments, while others have paused international student applications and opened up waitlists in a bid to avoid going over the indicative caps they had been supplied.

University peak bodies told the ABC that the uncertainty had led to chaos throughout the sector as they worked to finalise their end-of-year budgets.

Vicki Thomson, chief executive of Group of Eight, which represents some of Australia's most prestigious universities, said the Coalition's decision to block the bill was a win for the economy and commonsense.

She said international students had been "blamed for everything from the housing crisis to rising cost of living, yet responsible for neither". 

"A bill supposedly intended to weed out shonky and dodgy providers developed into a genuine threat to Australia’s most successful services export worth $51 billion — international education."

Under Labor's proposed changes, each higher education and vocational provider would be given their own limit on the number of international students they can enrol, based on a formula that takes into account previous levels of international student commencements and the make-up of their student body.

A Labor-led Senate inquiry into the proposed legislation last month recommended that a ministerial power to set the caps down to the course level be scrapped, but that the bill should be passed.