Tradies who have a licence to operate in their home state or territory will soon be able to carry out similar work in all jurisdictions under the same licence.
The program, agreed to by federal, state and territory treasurers under the Council on Federal Finance Relations framework, will come into effect on January 1, 2021.
As part of the scheme, tradies who have a licence in one state will be automatically registered to undertake work in any other state or territory.
It is the first agreement to come out of the council since it was set up following the establishment of the national cabinet following the coronavirus outbreak.
Federal Treasurer Josh Frydenberg said the new scheme was designed to help tradies move more freely to other parts of the country where there was more work in their chosen industry.
"This will especially assist our tradies [to] apply their craft around the country without having to get individual licences in each state or territory if they are working across borders," Mr Frydenberg said.
"This reform sees federal, state and territory governments working co-operatively to get people back to work as restrictions are eased and our economy reopens."
Figures show there are more than 800 occupational licences for manual trades alone. An estimated 20 per cent of workers across the country are required to be licensed as part of their job.
While recognition of some licensed occupations works across states and territories, in many instances workers have to apply to have their licence recognised, or pay additional fees to work elsewhere.
The scheme looks to benefit workers who have to move interstate constantly for jobs or who live in border communities. Tradies in the ACT looking to carry out work across the border in regional NSW, for example, currently have to complete applications and pay an additional licence fee.
While border restrictions have meant many people have been unable to travel interstate for work, figures show more than 300,000 people migrated interstate during 2019.
The council of treasurers is expected to report back to the national cabinet about the scheme in October.