Japanese Prime Minister Yoshihiko Noda has confirmed his country - which boasts the world's third biggest economy - will join Australia, the US and seven other countries in talks for a Trans-Pacific Partnership (TPP).
The TPP is set to be a major focus for leaders including Prime Minister Julia Gillard at this weekend's APEC Summit in the Hawaiian capital Honolulu.
It appears likely US President Barack Obama will announce the outline of a broad agreement on turning the TPP into a far-reaching free trade agreement after talks on Saturday, local time.
Trade Minister Craig Emerson has warmly welcomed Japan's decision.
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"Australia looks forward to working with Japan, and our current TPP partners, to bring them into the negotiations," Dr Emerson said.
"Having the world's third-largest economy commit to such an ambitious project would be an extremely positive development."
The inclusion of Japan would create a regional market around 40 per cent bigger than the size of the European Union, Dr Emerson said.
"It is especially encouraging coming so soon after the natural disasters which caused so much human suffering and economic damage to Japan," he added.
Australia believes the TPP has the potential to become a building block for the ultimate goal of a free trade deal covering the entire Asia-Pacific region.
Dr Emerson said Australia will continue to consult closely with business, unions and community groups in developing its position on various aspects of the TPP.
