PNG foreign affairs minister Rimbink Pato and Australian counterpart Marise Payne signed off on the agreement on the sidelines of the High Level Dialogue on Indo-Pacific Cooperation in Indonesia.
The scheme provided Australian employers with access to workers from the region to help their businesses grow.
Over 400 PNG workers have already participated in Australia's Seasonal Worker Programme.
will now join Kiribati, Nauru, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu in the Pacific Labour Scheme.
The Australian government says participation in the Pacific Labour Scheme will help to build on this, providing more PNG workers with access to skills development.
The country joins Kiribati, Nauru, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu as a participant.
The scheme commenced on July 1, following a pilot program in northern Australia.
Australian employers can participate in the scheme when labour market testing demonstrates no local workers are available to fill available positions.