Indonesian police say the 29-year-old Victorian was shot five times while travelling in a car. No-one else in the car was hurt.
Foreign Affairs Minister Stephen Smith says the Indonesian National Police have assured him the shooting is being treated as a high-priority case.
"The Indonesian National Police have requested the Australian Federal Police provide officers to Papua to assist in the investigation," he told reporters.
"As a consequence of that, early this morning two Australian federal officers arrived in Papua province from Jakarta to assist."
An autopsy was performed at a Central Jakarta Hospital last night.
Papua police say the ambush was pre-planned by gunmen using military-issue weapons.
"The shooting was pre-planned. [It's] clear they [the attackers] were using weapons belonging to the police or the military," Papua police chief Bagus Ekodanto said.
The attack occurred in Freeport's vast concession area, which includes the massive Grasberg gold and copper mine.
Police are still investigating the number of attackers involved and their motive for killing, Mr Ekodanto said.
"He [Grant] was shot five times in the neck, chest and stomach from a distance of 25 metres. We're still investigating the case. We don't want to be hasty and say they are from separatist groups," he added.
Freeport Indonesia is the largest single taxpayer to the Indonesian government.
Grasberg sits on the world's largest gold and copper reserves on the far eastern extreme of the Indonesian archipelago.
Pro-independence militants have waged a long-running insurgency against Indonesian rule in Papua, which is off-limits to foreign journalists without special permission.
-ABC/AFP