The Vietnamese government has agreed to allow restricted access to the Long Tan Cross site with strict conditions.
The planned ceremony remains cancelled, but small groups of 100 people or fewer will be able to travel to the site from Thursday morning.
The concession follows high-level consultations between the Australian and Vietnamese governments, the Department of Foreign Affairs and Trade's Smartraveller website said.
Veteran's Affairs Minister Dan Tehan said it was a good outcome Prime Minister Malcolm Turnbull was able to negotiate.
"Obviously we were all shocked and disappointed yesterday with the news that had come from Vietnam," he told the Nine Network.
"Our hope is now that our veterans and their families will be able to travel to the site and pay their respects to the fallen and to all those who served in a very dignified way."
Mr Tehan said Australian officials will do their best to make sure everyone can get access.
Restrictions to wearing medals were consistent with past practice.
"There is still sensitivities in Vietnam regarding the war," he said.
Vietnam Veterans Association of Australia National President Ken Foster worries the news might not filter through to veterans who are busy getting ready for their own commemorations.
"A lot of them will still be very distressed at the thought that their mates that are over there at the moment won't be able to visit the site," he said.
"So there's going to be potentially some fallout from this."
He reminded veterans in Australia and those returning from Vietnam counselling services are available for them.
'Kick in the guts'
Vietnam on Wednesday cancelled a long-arranged commemoration ceremony for Australian war veterans in a move Canberra described as "a kick in the guts" that it is seeking to overturn.
More than 1,000 veterans and their families travelled to Vietnam to mark the 50th anniversary of the Battle of Long Tan, which was to be held on Thursday.
"We have been working with the Vietnamese government for over 18 months for this, towards making sure that this commemoration took place in a low-key, dignified and respectful way," Veterans Affairs Minister Dan Tehan said.
"For us to be given such short notice of the cancellation is, to put it in very frank terms, a kick in the guts," he said from Canberra.
The Battle of Long Tan took place on August 18, 1966 and was the most costly single battle fought by Australian soldiers in the Vietnam War. Seventeen Australians were killed in action and 25 wounded, one of whom later died from his injuries.
Tehan said he was bitterly disappointed at the decision which he said "should not have occurred".
"My hope is that the Vietnamese government will overturn it," he said, adding that Prime Minister Malcolm Turnbull was hoping to speak to his Vietnamese counterpart on the issue.
