The Coalition is expected to reveal deep cuts to immigration today which the party says would maintain working holidaymaker places and prioritise skills as part of attempts to dent growing support for One Nation.

The opposition leader, Angus Taylor, is expected to unveil the Coalition’s policy on Tuesday, following sign off from Liberal and National MPs in a special party room meeting due to convene this morning.

Liberal sources told Guardian Australia the Coalition’s target for net overseas migration (Nom) would be significantly below Labor’s new target, but not cut as much as One Nation, which want to limit net arrivals to 130,000 people annually after a brief initial period of net negative migration.

As previously announced by Taylor, the number of new arrivals will be linked to housing completions in Australia.

One Nation announced last month it would cut the number of temporary migrants in Australia by more than 750,000 over three years targeting international students and family members of skilled migrants.

The Coalition’s plan is likely to contain the largest cuts in the first year, in an effort to make an immediate impact on Nom.

Foreign students and people overstaying their visas will be part of the Coalition’s crackdown, as well as measures to remove individuals in the country without a legal pathway to stay.

Last year Australia issued more than 337,000 international student visas, of which about 45,000 went to dependants or family members of the primary applicant.

Labor’s plan, outlined by the home affairs minister, Tony Burke, will see a series of policy changes to bring Nom down to 245,000 this financial year, and 225,000 in 2027-28.

Most students will not be allowed to bring family members, and so-called visa hopping would be banned, limiting the changes students can make to their enrolment.

Nationals MPs have warned Labor’s plans to limit the number of working holidaymakers staying a second and third year in Australia would badly hurt regional industries including fruit picking, and have pushed for carve outs.

Labor plans a ballot for backpackers wanting to stay beyond the initial first year, a measure designed to cut the number of temporary workers in the country. But regional hospitality and agriculture businesses have lobbied the Coalition to avoid cuts to its workforce.

Taylor is under pressure to stop and reverse an exodus of support to One Nation, as the party surpasses the Coalition and Labor in some opinion polls and its leader Pauline Hanson increasingly sets the terms for political and policy debate on immigration.

Liberal-National MP Andrew Wallace confirmed the plan had been modelled to test its effect on the Australian economy. “You can’t just slash immigration altogether,” he told Channel Nine.

“The Coalition’s plan on migration will be very, very carefully targeted towards ensuring that we have the right number of people coming into the country, but also the right skills.

“We’ve got to ensure that our farmers and our key industries have the right skills to be able to keep the country moving, and that’s what we’ll be focused on.”One Nation MP Barnaby Joyce, who defected from the Nationals last year, claimed credit for the Coalition plan on Tuesday.

“I congratulate the Coalition for basically coming up with our policy. There’s a bit of a nuance in there, but you know what? It shows an endorsement of where One Nation is off to,” he said.