The woman said to have been miraculously cured of a deadly disease after praying to Mary MacKillop said the Australian sister's road to sainthood was an inspiration.

Pope Benedict overnight approved a decree that will see Mary MacKillop, founder of the Sisters of St Joseph, become the country's first Roman Catholic saint.

The decree recognises a second miracle attributed to the intercession of Blessed Mary (1842-1909), which involved curing the woman of inoperable cancer through prayer.

She is likely to be formally declared a saint at a canonisation ceremony next year.

"This is wonderful news," the unnamed woman said in a statement after Catholic officials announced the Pope had recognised her recovery from terminal lung cancer in the 1990s as Blessed Mary's second miracle.

"I feel personally humbled and grateful to Mary MacKillop, and the influence she has had on my life."

The woman's return to health is the second event recognised by adherents as a miracle attributed to prayers to Mary MacKillop, the Melbourne-born nun who spent her life helping the poor and outcast and bringing education to the harsh Australian outback.

Mary MacKillop was beatified by Pope John Paul II in Sydney in 1995, after the Vatican declared she was responsible in 1961, decades after her death, for the curing of a woman with terminal leukaemia.

The woman at the centre of the second 'miracle', who does not want to be named to protect her family, gave little away about her illness or recovery in a statement read by leader of MacKillop's order, Sister Anne Derwin.

"On a day like today, you might have a thousand questions to ask about my story, and sometime in the future, I do want to share that with you," she wrote.

"I hope this news today provides others, especially younger Australians, with inspiration and encouragement to live as generously and as compassionately as Mary did."

In 2006, the family of Sophie Delezio, a little girl who cheated death twice after being involved in two horrific car accidents, credited her recovery to prayers to Mary MacKillop.

Three years later, the family of Irish man David Keohane who was brutally beaten and left for dead on a Sydney street prayed to Blessed Mary for his recovery. He later woke from an eight-month coma.

Aussies rush to claim MacKillop

Archbishop of Sydney Cardinal George Pell says the Pope's recognition of the second miracle is a wonderful Christmas present for the people of Australia.

[It is a] good day for Australia, and it's a good day for the church and it's a good day for all the good things in Australian life," he said.

Cardinal Pell also says the acceptance of Mary MacKillop's second miracle is recognition of the contribution Catholic women have made to the Australian people.

He hopes the recognition of her second miracle and her eventual sainthood will encourage lapsed Catholics to return to the church.

Catholic nuns working near Mary MacKillop's birthplace in the Melbourne suburb of Fitzroy have welcomed her impending canonisation.

Sister Josephine Dubiel from the Victorian Sisters of Saint Joseph says Melbourne, and Fitzroy in particular, is proud of her.

"Just across the road from where I am at the moment, she was born and she walked these streets here," she said.

"Then she came back later and set up providence for women and children in need of home and shelter, set up schools in this area.

"So she's a real woman that walked these streets as we do."

Father Thinh Nguyen from All Saints Catholic Church at Fitzroy says his parishioners are proud of their link to Mary MacKillop.

"She's been brought up in this area here and we have a plaque of her in Brunswick Street," he said.

"We like to claim her here because this is her birth place. And, as a saint, we always go back to the place where she was born. So we hope that this will be a great honour for us here in Fitzroy."

Congressional leader of the Sisters of St Joseph Sister Derwin has described Mary MacKillop as uniquely Australian and says the announcement has a special meaning for the order.

"Mary herself wouldn't have expected this sort of limelight and interest but it makes us feel excited that the gift she was given for the church, for the world, is being recognised as valuable," she said.

"And that was a gift to focus on those most in need in our society."

Sister Maria Casey, from the Sisters of St Joseph, was in Rome when the announcement came from the Vatican and says Australians need a holy icon in the face of today's hardships

"We have the economic downturn, we have high unemployment, we have racial problems, we have the whole problem of reconciliation," she said.

"I think Australians need an icon or a model of goodness and holiness at this time."

- ABC/AFP