Papua New Guinea's Government has formally given the go-ahead to Australia's request to set up a processing centre for asylum-seekers on Manus Island.
Prime Minister Peter O'Neill had already signalled his support for Australia's proposal, and now his cabinet has given its formal approval, the ABC reports.
Foreign Minister Rimbink Pato says cabinet has also decided that the centre will be funded under a new development assistance package.
In a short statement, he says the package will be separate to Australia's existing $A490 million aid programme to Papua New Guinea.
Mr Pato says the Manus provincial government will be involved in negotiating the make-up of the assistance package with the Australian Government.