"The problem with the bill is it takes control from the government and contracts it out to others who don't have those same interests or responsibilities," he was quoted as saying by the Sydney Morning Herald.
Australia has sent asylum seekers who arrive by boat to detention centres on the Pacific islands of Nauru and Manus.
The country's tough immigration policy has been repeatedly criticised. The detention centre on Nauru has been dogged by allegations of widespread abuse and trauma among children and women.
Slamming the proposal, which was passed in the Senate last year with the support of the opposition Labour Party, Morrison said it would lead to deaths at sea. "They have no idea of the consequences of what they are playing with. They will unleash a world of woe again."
Under the proposed changes, doctors would have the power to transfer refugees on Nauru and Manus to Australia for treatment. However, the Immigration Minister can ask an independent panel to review the medical assessment and would have the authority to overrule it, the BBC reported.
Defence Minister Christopher Pyne also voiced his opposition to the bill.
Meanwhile, thousands of doctors signed a petition calling for the bill to be passed. They called it "a sensible solution which allows doctors to take care of their patients if they need urgent care not available on Nauru or Manus".