Officials said the deal will boost tourism in the coming years, Wall Street Journal reported.
The agreement removes previous restrictions on the number of seats that airlines could offer between major cities in the two countries.
In the year through June, about 1.1 million Chinese visitors came to Australia, up 22% from the previous year and second only to New Zealand.
CAAC reported that air travel between China and Australia increased 13.5% YoY to 2.4 million in 2015, and is expected to increase to 3.0 million in 2016.
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