The agreement was signed at a ceremony attended by governor general Michael Ogio.
The agreement will allow Nautilus to retain a 70% stake in the project through an unincorporated joint venture to be established with the PNG government. The government's share will be held by Petromin Holdings.
The government's initial payment to secure the stake will be about $20-25 million, which represents its share of the exploration and development costs up to January of this year.
In the future, Petromin will contribute funds to the project in proportion to its stake.
The government has also taken a 5% interest in a separate joint venture holding company to be formed with Nautilus to provide services in the form of people and equipment to the project, and made an initial $1.8 million payment for the interest.
Nautilus chief executive Stephen Rogers said the signing of a formal agreement was an endorsement of the company from the PNG government.
"This step represents a major vote of confidence in Nautilus Minerals and the Solwara-1 project," he said.
"Through its equity partnership, the government will provide a significant capital investment and will retain a direct interest in the long-term success of the project."