The South Australian government has confirmed a commitment of almost $25 million to address the over-representation of Indigenous people in the state's justice system.

The four-year funding investment will support the delivery of a multi-pronged approach to support both agencies and Aboriginal communities in order to reduce incarceration rates.

The measures include $11.2 million for Yalakiana Tappa: reducing Aboriginal incarceration measures which includes a community support program, accommodation and support program and cultural residential drug and alcohol treatment facility; $6.3 million to extend participant access to the Work Ready Release Ready Program; and $4.6 million to secure and fit-out a new Port Augusta Community Corrections Centre.

The programs respond to the over-representation of Aboriginal people imprisoned in South Australia, with Aboriginal South Australians 12 times more likely to be imprisoned than the general population, with more than 60 per cent of Aboriginal prisoners being held on remand - not convicted of any offence.

Premier Peter Malinauskas said the South Australian government is aiming for a substantial reduction of Aboriginal people in custody by decade's end.

"We are committed to lowering the over-representation of Aboriginal people in custody by at least 15 percent by 2031," he said.

"A multi-levelled approach, which spans generations, is imperative in reducing these rates, and vastly improving the lives of Aboriginal people."

The budget allocation also sees $1 million to continue the current child diversion program, which diverts Aboriginal children aged between 10-13 years who have been charged with a minor offence away from a custodial environment and provided appropriate support.

A two-year, $737,000 investment has also been confirmed to develop and implement an Aboriginal Justice Agreement to formalise a relationship between government and Aboriginal communities to collaboratively improve justice outcomes for Indigenous peoples.

SA Minister for Aboriginal Affairs Kyam Maher said the investment addresses the "unacceptable" level of Aboriginal imprisonment in the state.

"Past government policy has not worked to change this state of affairs," he said.

"This needs to be addressed urgently. Providing a significant investment and concentrated effort will work to achieve the transformative change that is required."

The funding announcement also includes more than $700,000 for a two-year Youth Aboriginal Community Court to be based in Adelaide to implement protective factors and divert young people from further offending.

The funding commitment responds to recommendations made by the Advisory Commission into the Incarceration Rates of Aboriginal Peoples in South Australia.