North Korea must commit to full denuclearisation, Foreign Minister Julie Bishop said after the historic summit between Donald Trump and Kim Jong-un on Tuesday.
"We're cautiously optimistic, but, of course, the test will be verification of the denuclearisation," Ms Bishop told the ABC's 7.30 program.
"Complete denuclearisation means the complete, verifiable, irreversible dismantlement of North Korea's nuclear weapons program."
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The Australian government is assessing what 'expertise' it could offer in the verification process, she said.
"I imagine it will be the International Atomic Energy Agency, together with global experts, to complete the verification process that North Korea has in fact denuclearised."
Earlier in the day, the opposition leader Bill Shorten said he was cautiously optimistic.
"My view is you always achieve more by talking in the same room than yelling at each other through megaphones at a distance," he told reporters in Adelaide.
"We're pleased to see it but we've seen discussions before in previous decades that haven't necessarily amounted to much, so I think we should be encouraging of it but I wouldn't release the pressure to try and get a better outcome."
Former Australian prime minister Kevin Rudd was one of the first to respond to the signing ceremony.
"Just now, a very, very big moment in history ... and a long, long way to go," Mr Rudd tweeted.
Government frontbencher James McGrath put it in a historic context: "As Churchill said, it is better to jaw jaw than war war."
The Australian government joined the United States in tightening its sanctions regime against the rogue state earlier this year after a string of nuclear tests.
Australia has numerous diplomatic and financial sanctions, as well as travel bans, on the rogue nation.
In April, the government announced it would send a military spy plane to Japan to take part in international efforts to monitor the illicit activity of North Korean ships.
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