TA said all of the increase in the prize pool would go to the singles finalists, with the men's and women's runners-up each receiving $1 million.

"This is an investment in the major revenue source for our sport in this country," TA chief executive Steve Wood said in a statement.

Poll

Who will win the Punjab Elections?

BJP 32.76%

AAP 43.10%

INC 24.14%

Submit

View All In Poll

"The Australian Open Grand Slam trophy is one of the most sought after prizes in world tennis. We want to work with the players to further elevate the status of the Australian Open.

"We believe that $2 million is an appropriate reward for winning the biggest sporting event in the world in January," he said.

Wood said the dollar exchange rate did play a part in the timing of the announcement.

"We announced a prize money increase in October for the same reason to further enhance the status of the Grand Slam of Asia Pacific," he said.

"I also said at the time that we would monitor the exchange rate and review the situation closer to the event. We have done that and today's announcement is the end result."

Wood said TA wanted to continue to grow the Australian Open in partnership with the players.

The Australian Open takes place in Melbourne from January 19 to February 1.