The funding will be available at the request of the government and comes with a $5m grant for technical assistance to ensure reconstruction is resilient to future events.

World Bank chief executive officer Kristalina Georgieva said: “The government’s immediate relief efforts are robust and impressive.

“As we enter the reconstruction phase we are making up to $1bn of comprehensive support available for Indonesia. The best memorial to those who lost their lives is build back better.”

The proposed package is expected to help finance the rebuilding of “critical public facilities”, such as hospitals, schools, bridges, roads and water supply infrastructure, the bank said.

It would also strengthen monitoring and early warning systems.

Another proposed use, is to provide cash transfers to the poorest 150,000 families affected by the natural disaster for a period between 6 months to one year, as a short-term social protection system.

It is not yet certain how much money the government will request and how it will be spent.

Indonesia’s island region of Sulawesi was shook by a 7.5 magnitude earthquake and tsunami last month. After the event, the country’s president Joko Widodo called for urgent help from international donors.

The World Bank, which held its annual meetings with the IMF in Bali last week, said it had concluded a preliminary report, which found the damage and estimated cost of the infrastructure that was affected by the tsunami was around $531m.