Chinese companies will gain the right to sue Australian governments in international tribunals under an agreement that will eventually allow 95 per cent of Australian goods exports to enter China duty-free.

Declaring Wednesday a "momentous day", prime minister Tony Abbott said he and China's commerce minister Gao Hucheng would one day be able to say to their grandchildren: "yes, we were there the day this extraordinary agreement was signed".

The free-trade deal will eliminate the tariffs of up to 20 per cent on dairy exports within 11 years, eliminate the 12 to 15 per cent tariff on beef over 9 years and the 14 to 20 per cent tariff on wine over 4 years and give Australia an extra duty-free quota for wool.

When it comes into force 92 per cent of China's exports will enter Australia duty free, with most remaining tariffs removed after 4 years.