Decisions to send Australian troops to war will remain in the hands of federal cabinet.
But the Albanese government has agreed to set up a parliamentary oversight committee and allow debate on such major decisions.
Defence Minister Richard Marles said on Tuesday the government had agreed to set up a joint statutory committee on defence.
As well, ministers would present statements to the Senate and lower house on any decisions to engage in major military operations.
“Sending our defence force personnel into international armed conflict is the most consequential decision a government can make and is never taken lightly," Mr Marles said.
"This report and the government's response rightly affirms that this remains a decision for the executive, but that it is important parliament has effective mechanisms to examine and debate such decisions."
The inquiry into the issue was set up in September 2022 following an election commitment by the Albanese government to examine decision making on going to war. The report was released in March.
Details on setting up a new joint defence committee are still being worked through, such as its implementation and structure and what level of oversight it will have.
The government has agreed with all seven recommendations of the inquiry report into decisions on whether Australian troops should be sent off to war.
Recommendations included debate on the issue should happen in both houses of parliament.
The Greens had previously called for a joint session of parliament to approve any decision to send troops into combat.
The party has labelled the current system as vague and unaccountable.
"Australia is relatively unique among democratic countries in its lack of parliamentary authorisation or oversight on military deployments overseas," Greens senator Jordon Steele-John said at the time of the report's release.
"We will continue to push for a system that requires both the consent of the people and consultation of parliament to determine how and when Australia goes to war."
