Google has threatened to remove its search engine from Australia over the nation's attempt to make the tech giant share royalties with news publishers.

Axar.az reports that Australia is introducing a world-first law to make Google, Facebook and potentially other tech companies pay media outlets for their news content.

But the US firms have fought back, warning the law would make them withdraw some of their services.

Australian PM Scott Morrison said lawmakers would not yield to "threats".

Australia is far from Google's largest market, but the proposed news code is seen as a possible global test case for how governments could seek to regulate big tech firms.