The new trade deal is expected to eliminate 98 per cent of tariffs in the trans-pacific marketplace and is worth more than $12 trillion.
Australia is among 11 nations who have signed up to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
The accord has eleven member countries - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
But what is the CPTPP and how will it impact the Australian economy?
What is it?
Signed in Chile on Thursday local time, the CPTPP is a new international trade pact described as a strong signal against protectionist pressures.
It is a replacement for the Trans-Pacific Partnership (TPP), a similar plan that was thrown into limbo early last year when United States President Donald Trump withdrew from the deal. He said the deal was not in the best interests of American workers.
Australia pushed hard to revive a form of the original TPP deal after Mr Trump withdrew.
The deal is expected to eliminate 98 per cent of tariffs in the trans-pacific marketplace, and is worth more than $12 trillion.
The 11-member nations of the new deal produce roughly 13 per cent of the world's entire economic output.
The likes of Taiwan, Thailand, South Korea, the Philippines and the United Kingdom are all regarded as possible additions to the CPTPP.
What does it mean for Australia?
The signing of the CPTPP comes amid confusion as to whether Australia will be granted exemptions to the US's tariffs on steel and aluminum.
Prime Minister Malcolm Turnbull said the accord was a historic achievement and would boost jobs in Australia.
Trade Minister Steve Ciobo said the signing of the CPTPP represents "a very good day for trade".
"We are sending a mutual signal that we recognise the policy orthodoxy of trade. Trade is good for economic growth, trade is good for jobs, trade is good for promoting prosperity," he said.
Mr Ciobo said Australian farmers, manufacturers, service providers and small businesses were likely to see benefits.
But before the agreement can be implemented, it must be ratified by at least six member governments.
The Trade Minister said Australia should complete their part of the process by September this year.
"From Australia's perspective, our domestic process will commence with the introduction of legislation to the parliament later this month," he said.
"I would envisage and anticipate that Australia should be in a position to have that domestic ratification process completed by around about the end of the third-quarter of this year."
Mr Ciobo said there was a side deal with Canada for the phase-out of tariffs on beef exports over five years.
There is also a better deal for Australian cheese and beef exports to Japan, and new quotas for rice and wheat.
Australian sugar should also have better access to Japan, Canada and Mexico's markets.
What are the other countries saying?
New Zealand's Trade and Export Growth Minister David Parker said the CPTPP would help empower marginalised communities.
"We see these agreements as helping measure the effectiveness of trade in support of overcoming the challenges of poverty, and farming to degradation, the rights of indigenous groups, [and] the rights of women in order to participate more fully in our economies," he said.
Mr Parker said laws to implement the pact were already being drawn up in New Zealand.
Japan, the world's third-largest economic power, is one of the heavyweight members of the deal.
The country's Economic Policy Minister Toshimitsu Motegi said Japan was ready to play a leading role in getting the accord up and running.
"Japan is prepared to continue to facilitate the communication and co-ordination among [the] 11 countries," Mr Motegi said.
"I'd also like to congratulate all the member counties here today for having reached this agreement very quickly, despite a number of different difficult challenges."
Chilean Foreign Minister Heraldo Munoz said the deal sent a powerful signal that international trade was still very much alive.
He also said he was satisfied the deal was signed, but it was crucial the benefits were shared among the citizens of all member countries.
"At times of rise in protectionism, what we have achieved constitutes a significant political message to the Asia Pacific region and to the rest of the world," Mr Munoz said.
"It signals our decisive commitment to trade liberalisation, regional integration, economic growth and job creation. It signals our decisive commitment to comprehensive and progressive, and let me add inclusive trade."
Canadian Minister of Commerce François-Philippe Champagne said his country was proud to part of the agreement.
"We believe that by making trade real for people, that making sure that our trade agreements provide real tangible benefits to all citizens in our respective countries and in the CPTPP region," he said,
"Today we are very proud to stand with our colleagues from Chile, and our colleague from New Zealand to show the world that progressive trade is the way forward, that fair, balanced and principled trade is the way forward and that putting citizens first is the way forward for the world when it comes to trade."