Hong Kong already has the greatest concentration of Australian businesses outside Australia but it will now be easier to compete in the Asian city thanks to a new free-trade deal.
The deal, signed on Tuesday morning, joins the Indonesia and Peru agreements waiting to be ratified when the new parliament sits after the May federal election.
Trade Minister Simon Birmingham signed the deal with Hong Kong in Sydney.
"Under this agreement zero tariffs will be locked-in on goods, market access will be guaranteed for services suppliers, and conditions for two-way investment will be significantly improved," he said.
"We also agreed to a series of cutting-edge rules - particularly on data flows and data storage - to facilitate trade and investment and provide certainty and confidence to Australian investors."
While exporters will benefit, the deal opens up better market access for services companies.
Hong Kong is home to the largest concentration of Australian businesses operating overseas anywhere in the world, and there was $US18.8 billion ($A26.5b) worth of trade between the two economies in 2017/18.
HSBC Australia chief executive Martin Tricaud said Australian businesses were now well placed to take advantage of a huge market.
"The agreement will create opportunities for Australian business that extend beyond Hong Kong to the Greater Bay Area, which also includes nine mainland (China) cities and Macau," he said.
"China's new plans for the economic integration of this region mean its consumer market may double to nearly $US900 billion by 2025."
Senator Birmingham said hundreds of Australian firms competing across the finance, construction, communications, hospitality, education, retail, logistics and professional services sectors would get better access to Hong Kong.
"Australia now regularly records trade surpluses thanks in part to the trade deals we've done with our major partners," he said.
"In fact, last calendar year was the first time in 46 years that every single month was a trade surplus."
Hong Kong was Australia's fifth largest source of foreign investment at the end of 2017 with $116.6 billion invested. In the same year, it was the 10th largest destination for Australian foreign investment abroad at $47.4 billion.
Parliament will have to ratify the deal, but it is unclear whether Labor will support it in its current form.
Labor opposes the inclusion of investor-state dispute settlement clauses in free trade deals, which allow companies to sue governments.
Australian Associated Press