Facebook has threatened to stop users from sharing news content in Australia as it prepares for a new law forcing it to pay publishers for their articles.

Regulators want tech giants like Facebook and Google to pay for the content reposted from news outlets.

Last month Google warned its users that its search services could be "dramatically worse" as a result.

Facebook's latest move to block news sharing has escalated tensions between tech firms and regulators.

The social media network said that if the proposed legislation becomes law it will stop Australians from sharing news on Facebook and its subsidiary Instagram.

The Australian Competition and Consumer Commission (ACCC) has drawn up the rules to "level the playing field" between the tech giants and publishers that it says are struggling due to lost advertising revenue.

The ACCC responded to Facebook's threat to block news content saying it was "ill-timed and misconceived".

"The code simply aims to bring fairness and transparency to Facebook and Google's relationships with Australian news media businesses," ACCC chairman Rod Sims said