Up to 2,000 Pacific Islanders will be able to work in rural areas of Australia to cover shortages in low and semi-skilled jobs.
Prime Minister Malcolm Turnbull signed the deal at the Pacific Islands Forum in Samoa today.
The broadcaster, SBS, reported the announcement expands the current farming-based seasonal worker scheme to include industries like tourism and aged care.
Mr Turnbull said the plan would help the development of both Pacific Island states and regional Australian towns struggling to recruit workers.
Australia has also promised to fund new aerial surveillance missions over the Pacific to detect and disrupt illegal fishing.
Ahead of the Forum, Mr Turnbull's government signalled a "step up" in its engagement in the region.