Prime Minister Anthony Albanese and his PNG counterpart James Marape met in Sydney on Thursday to shake hands over the deal to welcome a PNG team into the NRL in 2028.
The pair reached an in-principle agreement with the NRL in May, and the three parties have since been ironing out specifics at the tail-end of two years' negotiations.
The final legal documents to ratify the team's creation are expected to be signed in the coming weeks.
"Rugby league is PNG's national sport and PNG deserves a national team. The new team will belong to the people of PNG and will call PNG home," Albanese said.
"I know it will have millions of proud fans barracking for it from day one. Not just in PNG, but I suspect many Australians will adopt the PNG team as theirs."
The team will be either the NRL's 18th or 19th franchise, pending further expansion into Perth, and will be propped up by funding from both governments.
The Australian taxpayer will kick in $600 million over the 10-year life cycle of the agreement, which expires at the end of 2034.
For its part, the PNG Government will grant income tax exemptions to those relocating, meaning players could pocket almost twice their Australian salary if they signed on.
The PNG Government will also be in charge of funding and building a secure living compound for the team's players and staff.
Safety has been a chief concern amid the expansion plans, especially given the large number of NRL players with young families.
PNG has been estimated to have the second-highest crime rate in the world behind only Venezuela.
But Marape said the creation of an NRL team would mark a "total lifestyle transformation" for his country.
"For the NRL team to be based out of Port Moresby, it gives me enough reason now to ensure Port Moresby is safer, Port Moresby is cleaner, Port Moresby is better," he said.
"Come 2028 I can bet my life on this ... it is on my own international interest to make sure PNG is safer.
"I have daughters and children who will live in PNG forever. The catalyst to make it urgent for me right now is the three-year window I have until 2028.
"We want to make it safe for our players, we want to recruit the best players and we want to nurture the younger ones to play."
The NRL will be unable to ask for extra funding during or after its deal, and the Federal Government has the ability to withdraw support at any point if PNG signs a security deal with China.
Some $60 million of it will exist as the licensing fee, with that money to be distributed to clubs.
Another $290 million will be used to support the franchise, while the remaining $250 million will be for rugby league pathways in the Pacific.
PNG PM James Marape addresses the media at Thursday's announcement. (Mick Tsikas/AAP PHOTOS)
The creation of the team is seen as the first step to tap into the wealth of talent in PNG, where rugby league is the national sport.
Albanese suggested if Penrith could parlay its western NSW talent pool into four consecutive premierships, PNG could become an NRL behemoth with a population of 12 million at its disposal.
"If you look at the amount of Samoan and Tongan players playing in the NRL, compared to PNG, PNG is under-represented," he said.
"That is due to economic development issues and opportunity. Once you bring in that economic development junior pathways and opportunity, I have no doubt that PNG within a very short few years ... they will be a powerhouse."
ARL Commission chairman Peter V'landys also insisted the move would have an impact for the NRL across the entire Pacific.
"This new club will solidify rugby league's role as the unifying language of our region," V'landys said.
"Roughly half the funding in this historic agreement with the federal government will go to grassroots football and community programs in PNG.
"It will also flow across the Pacific, including to Fiji, Tonga and Samoa.
"The new PNG team provides the NRL with a new 10 million-plus audience, many who will go from being casual fans into engaged fans."
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