The joint state and commonwealth funding, announced on Wednesday, supports continued Nyrstar operations in South Australia's Port Pirie and Hobart until the end of 2026.
The money would allow the company to continue work on a two-year feasibility study into critical minerals production and modernisation, Industry Minister Tim Ayres said.
"It is really important as Australians we value these facilities and think carefully about the industrial capability that we need for the future," he said in Hobart.
"This is about securing jobs, strengthening our industrial base and positioning Australia higher up the global value chain."
The agreement follows the expiry of a $135 million rescue package in May and weeks of tense talks over how much taxpayer money would be put on the table to secure the sites.
Nyrstar, headquartered in the Netherlands, is a major producer of lead, silver, zinc and other minerals at the Port Pirie and Hobart sites.
South Australian Premier Peter Malinauskas said there was also an opportunity to produce antimony at Port Pirie.
Antimony, of which China is the world's largest producer, is used in electronics, to harden batteries and is important to defence capabilities.
A short-term funding deal had been struck because a longer-term one ran the risk of "throwing good money after bad" if information came to light about operations not stacking up, Mr Malinauskas said.
It had not been an easy period for the people of Port Pirie, he added.
"The smelter is the economic engine room of that town, so to lose the smelter would be very consequential indeed to its future," he said.
The Port Pirie smelter employs 800 people, plus 550 contractors, while the Hobart site has about 600 workers.
Nyrstar hasn't ruled out the need for further government money to ensure operations can continue.
Port Pirie smelter general manager Darin Cooper said Nyrstar was absorbing losses of about $15 million a month.
But he added the latest funding wasn't a bailout but was instead about supporting critical metals supply and sovereign capability.
Nyrstar was facing challenges in the global metals processing sector, represented by market concentration and industrial subsidies in countries including China, Mr Ayres said.
Hobart smelter general manager Todd Milne said the company would potentially need more government help and it would be difficult to see it operating without some sort of government partnership in a "skewed" market.
"I see that continuing through until we can articulate what the future of the operations looks like," he said.
The pre-feasibility study will be finished in coming months and detailed feasibility work will continue into the middle of 2027.
The federal government contributed $62.5 million to the latest funding, with South Australia chipping in $35 million and Tasmania $7.5 million.
"It's not only about national sovereignty … but most importantly the people it affects on the ground," Tasmanian Premier Jeremy Rockliff said.
"If we lose major industrials such as Nyrstar, we will never get them back."
The funding is the latest in a series of taxpayer lifelines for ailing facilities, including a $2 billion bailout for Rio Tinto's aluminium smelter in the central Queensland town of Gladstone.
The federal government has also put money into Glencore's copper smelter in Queensland and the Whyalla steelworks in South Australia to keep the facilities afloat.
Under the previous rescue package, Nyrstar shipped Australia's first consignment of domestically produced antimony.
As part of the latest agreement, the company will launch a joint review with governments to map out long-term options for the two sites.
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