Cambodia's Foreign Minister said in February that it was considering the idea.
"Previously it's been Cambodians who have sought asylum in other countries; now maybe it is time that Cambodia accept asylum seekers," Hor Namhong was quoted as saying by the Cambodia Daily, after Australia first raised the suggestion.
Australian Prime Minister Tony Abbott said Friday he would welcome a positive decision by Cambodia.
"People smuggling is a regional problem. It needs to be dealt in with in a regional way," he told reporters.
But he stressed that the decision "is really a matter for Cambodia."
Officials in Phnom Penh were tight-lipped on the matter Friday.
"I have no information on this," said Koy Kuong, a spokesman for the Foreign Ministry. "I have no time to speak to the press," said Long Visalo, a secretary of state with the ministry.
Abbott was elected in September on a strong promise to "stop the boats," and has proudly declared that no boat carrying asylum seekers has arrived on Australian soil for more than 100 days.
His government's controversial policies include forcing people off the fishing boats hired from Indonesia to reach Australia, putting them in lifeboats and towing them back towards Indonesia.
More than 2,000 asylum seekers are also being held in crowded detention centres on remote Manus Island, part of Papua New Guinea, and the Pacific island nation of Nauru.
Papua New Guinea agreed Thursday to allow all detainees held at Manus Island who are found to be genuine refugees to settle in the country.
The Abbott government's policy has been condemned by the Greens, who said Australia is trying to fob off its refugees onto the poorer nations of the world.
Rights groups in Cambodia said its own history with refugees makes it the wrong country to take Australia's.
In 2009, Cambodia repatriated 20 Uighur refugees to China while their asylum applications were still being processed by the United Nations. Several were subsequently given life prison sentences in China.
After the deportation, China pledged 1 billion dollars of investment to Cambodia.
Denise Coghlan, country director of the Jesuit Refugee Service in Cambodia, said there were also practical obstacles, and that authorities there "don't have the competence or resources" to accept the asylum seekers.
"I think it's utterly immoral of Australia to be asking a country...where many people live below the poverty line" to take on refugees, she said.
"It would be stupid for the government to accept," she said.