Western Australia's Premier Colin Barnett has signed a memorandum of understanding on trade with its sister province in China, Zhejiang, local media reported on Wednesday.
Under the new trade agreement signed by Barnett and Xia Baolong, secretary of the Zhejiang Provincial Committee of the Communist Party of China, Western Australia's cattle would be transported live to China's Zhejiang and the meat would be distributed from the province's new abattoir.
Barnett said he hoped approvals would be granted in Australia and China over the next six months.
Private sector investment options would also be investigated over that time, he said.
"I'm optimistic that this will succeed," Barnett told the radio networks of the Australian Broadcasting Corporation (ABC).
However, Barnett stressed that the deal was still in its early stages.
"This would be a market as big, if not bigger, than the Indonesian market for our industry," he said.
"There's no doubt there is a massive demand for meat, for protein, and for high quality and safe meat."
Barnett also said Australia should not discourage China's investment in the country.
"The reality is the big industries in China, at this stage, are all state-owned and I don't think we should in any way discourage their participation," he told ABC radio on Wednesday.
"They are the ones investing in the mining industry and the petroleum industry in Western Australia."
He said that the total amount of Chinese investment in Australia overall was less than that of the United States and Europe.