The price cap will be applied to 30 products including milk, bread, rice, chicken, toothpaste and toilet paper across 76 remote stores.
New laundries will also be rolled out or upgraded in 12 rural areas to improve the health of residents.
Delivering the Closing the Gap statement at Parliament House in Canberra on Monday, Anthony Albanese revealed just five of 19 targets outlined in the strategy are on track to being met.
The prime minister said the road ahead wasn't easy, and the nation couldn't "turn our back" to entrenched disadvantage and violence affecting Indigenous people.
"To close the gap would ultimately erase the gulf that lies between us and our true potential as a nation," he said.
"It is about ensuring that all Australians get the same chance in life."
Under the government's plan, up to 120 Indigenous workers in remote stores will be upskilled to build a nutrition workforce.
The Indigenous Business Australia's Home Loan Capital Fund will receive a boost to increase opportunities for First Nation people to buy their own homes and build intergenerational wealth for their families.
Scholarships will be provided for up to 150 Indigenous psychology students to increase the availability of culturally safe mental health support.
Indigenous Australians Minister Malarndirri McCarthy said the government was creating "systemic change" to improve how agencies worked with First Nations people.
"We are focused on creating jobs with decent conditions in remote Australia, addressing housing overcrowding, supporting healthy children and safe families, and community driven responses to address the causes of crime," she said.
Pat Turner, the lead convenor for a coalition of peak Indigenous bodies, said the full impact of the changes would take time to materialise.
"Closing the Gap is not just policy, it is the intentional pursuit to make life better for our people and for the generations that come after us," he said.
"We will hold governments and ourselves accountable until we achieve real, lasting change."
Opposition Leader Peter Dutton said politicians had the opportunity to do "what's right and effective" which was owed to disadvantaged Indigenous Australians and taxpayers.
"There's little that we can do if safety and housing and health and education and employment are not there for Indigenous Australians and in too many parts of the country today, those basics are missing," he said.
"We have to make sure that as a national parliament, we can work together in a bipartisan way to achieve better outcomes."
Greens Senator and Indigenous woman Dorinda Cox said successive Labor and coalition governments had failed to address structural issues.
"What's not written here is that the lack of action on these targets are continuing to keep First Nations people out of schools, out of hospitals, out of workplaces, and in detention centres and putting our people in early graves," she said.
The government last Friday announced more than $800 million for the Northern Territory Remote Aboriginal Investment.
The funding will go towards services such as policing, women's safety, education and alcohol harm reduction.
Opposition Indigenous health spokeswoman Kerrynne Liddle said the pricing of essential grocery items in remote areas was "outrageous", but would not say if the coalition would back a similar policy to the price cap.