Avalon is poised to become Melbourne's second international airport after the Australian and Philippines governments cleared the way for direct flights in and out of there.

The breakthrough agreement is also said to have catapulted Melbourne well ahead of Sydney as the two cities vie to be the first with two international airports.

Avalon Airport. Credit:Joe Armao

Australia and the Philippines signed a memorandum of understanding on Friday that a Philippines airline could fly directly between Manila and Avalon airports once a day.

The agreement means Avalon is now free to strike its own deal with a Philippines airline. It is understood Philippines airline Cebu Pacific has already written to the Commonwealth signalling its desire to fly in and out of Avalon, which is 56 kilometres south-west of Melbourne.