Going the other way, British products including cars, Scotch whisky, biscuits and ceramics will be cheaper to sell into Australia.
The deal eliminates tariffs on imported Australian goods such as wine, swimwear and confectionery, it said.
Prime Minister Boris Johnson said the deal "marks a new dawn in the UK's relationship with Australia, underpinned by. shared history and common values".
Australian Prime Minister Scott Morrison and his British counterpart Boris Johnson overcame sticking points during talks after the Group of Seven meeting in Britain over the weekend, which Morrison had attended as a guest.
With reference to the farming industry that had been concerned about greater Australian imports, the government said that British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff-rate quotas and other safeguards.
"Apart from the extra checks that will apply following the trade agreement reached last December, the threat to our markets is the biggest fallout for Irish farmers from the vote almost five years ago", he said.
Secretary of State for global trade Liz Truss said: "This deal delivers for Britain and shows what we can achieve as a sovereign trading nation".
It follows similar United Kingdom trade deals reached with Japan and the European Union following London's divorce with Brussels. The estimated impact of the deal on Australia's GDP is somewhere between 0.01% and 0.06%.
Foreign Secretary Dominic Raab said on Twitter that the deal is "an important stepping stone" in efforts to join a massive free trade zone in the Indo-Pacific region - the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
"Quite simply, the agreement fails our farmers, and it fails consumers who care about animal welfare standards". "But I think it is a good deal and I think it's one that will benefit British farmers and British consumers as well".
"A trade deal with Australia will come as great news for many of our members who have always been exporting there as well as those who are hoping to expand their trade ambitions, said Mike Cherry, National Chair of the Federation of Small Businesses".
"The UK Government must publish the full details of the deal without delay, allow proper parliamentary scrutiny, and ensure meaningful consultation with the Scottish Government, and Scotland's food and drink sector, to prevent disastrous consequences".