The federal government has signed off one of the key conditions to open up the live cattle export trade with China.
Agriculture Minister Barnaby Joyce gave his tick of approval to the animal health certification requirements on Monday, which once signed by China, will allow commercial arrangements to commence.
The move is a breakthrough in live cattle export trade negotiations and could eventually result in one million head of cattle sent to China annually, Mr Joyce says.
Once the health condition agreement is signed by Chinese agriculture minister Zhi Shuping, Australian exporters will be able to work with Chinese importers to develop a supply chain assurance system.
A new commercial agreement would be a win for Australia's live cattle industry, which recently suffered a blow when Indonesia announced a dramatically reduced import quota.
Indonesia announced last week it would only accept 50,000 head of Australian cattle for July to September, a fraction of the 250,000 imported in the past three months.
The government believes the reduced intake was a one-off, not an ongoing reduction.
Mr Joyce says Australia and China have had significant trade in breeder cattle over the past five years, but a commercial agreement on live slaughter and feeder cattle would create a new market.
"Getting the groundwork right for any new market can take time, and now the industry can prepare to begin this trade," he said.
The Australian Livestock Exporters' Council said the "much anticipated agreement" had been years in the making and significantly improved market diversification options for exporters and producers.
Chief executive Alison Penfold said Australia would be the first country to export feeder and slaughter cattle to China.
"The true potential of the China market is something exporters are very keen to explore with a steady stream of quality cattle as soon as possible," she said.
Ms Penfold warned it was difficult to predict when the first live cattle may sail to China but hoped it would be in the next couple of months.