A team from Papua New Guinea will enter the NRL from 2028 after officially being granted a licence by the league.
Prime Minister Anthony Albanese and his PNG counterpart James Marape met in Sydney on Thursday to shake hands over the deal, the culmination of two years of planning.
The pair reached an in-principle agreement with the NRL in May, and have since been ironing out specifics.
The final legal documents to ratify the team's creation are expected to be signed in the coming weeks.
"I am delighted to announce the Australian government is supporting a PNG team to join the NRL from 2028," Albanese said.
"Rugby league is PNG's national sport, and PNG deserves a national team. The new team will belong to the people of PNG and will call PNG home.
"I know it will have millions of proud fans barracking for it from day one. Not just in PNG, but I suspect many Australians will adopt the PNG team as theirs."
The as-yet-unnamed team is seen as key diplomatic tool for Australia to strengthen ties in the hotly-contested Pacific, and will cost the Australian taxpayer $600 million over 10 years.
It will be either the NRL's 18th or 19th franchise, pending further expansion plans into Perth.
Players will be granted tax incentives to relocate to PNG, and will live in a secure compound in Port Moresby to be organised and funded by the PNG Government.
Initial estimates suggest that players will therefore be able to pocket almost double the amount of money they would on the same salary in Australia.
The 10-year deal with the Australian government will commence now and run until the end of 2034.
Some $60 million of it will exist as the licensing fee, with that money to be distributed to clubs.
Another $290 million will be used to support the franchise, while the remaining $250 million will be for rugby league pathways in the Pacific.
The NRL will be unable to ask for extra money through the life of the deal, and the federal government has the ability to withdraw support at any point.
The deal is also contingent on Papua New Guinea building safe, world-class accommodation for players and officials.
Players' union boss Clint Newton says the NRL should consider amending contracting rules for expansion clubs in a bid to prevent recruitment issues.
NRL rules prohibit clubs from approaching contracted players until the final year of their deal, meaning PNG would have to wait until November 2026 to start any negotiations.
The Dolphins had similar restrictions ahead of their 2023 entry, but the fact they were only announced in October 2021 meant they could start recruiting almost immediately.
Even then their desire to land a big target early prompted issues and an eventual rule change, following their publicised talks with an under-contract Cameron Munster.
PNG, and a potential 2027 outfit-based in Perth, would also have greater recruitment challenges, given the need to lure players from either overseas or interstate.
One potential option would be to allow new franchises to approach players earlier than 12 months out from their first pre-season to allow time to build rosters.
NRL rules already allow for clubs to have a right of reply before one of their players signs elsewhere and expansion teams would have no interest in inducing a player to walk early.
Any such change would require an amendment to the collective bargaining agreement between the Rugby League Players Association and NRL.
The existing clubs would also need to be involved, where it is thought there could be some push back.
"Realistically the recruitment runway the Dolphins had was not ideal and you would think many lessons were learned which could prevent the same issues repeating this time around," Newton told AAP.
"So we believe amendments should be strategically explored and agreed upon well before an expansion team needs to start recruiting.
"For the current CBA, we worked proactively with clubs and the NRL to negotiate changes to the contracting restrictions that have helped to keep the current November 1 window really watertight.
"Amendments can be made to those current restrictions, but it takes the clubs and NRL coming together with the RLPA to work through the possibilities and ensure the amendments are mutually beneficial to players and current and expansion clubs."
PNG officials are well aware they will have to lean on the talent of other NRL clubs on their entry, but want to eventually reach the point where several of their players are home grown.
To date, the Queensland Cup's PNG Hunters are yet to produce an NRL player some 10 years after their entry. Several of their products have featured in England.
But PNG bid CEO Andrew Hill is confident enough talent exists on the ground, with 720 players currently in elite academies and the Junior Kumuls drawing with the Australian schoolboys side this year.
"The physical testing we have done over the past two years suggests PNG boys and girls are on par physically," Hill said.
"Where they have lacked is they have never been given the opportunity with the right coaching and the right facilities.
"We've already seen enormous progress in the past two years and to think we have another three years before we come into the competition."