Australia's Health Minister Sussan Ley said the government is finalising draft amendments to the Narcotics Drugs Act 1967 to allow controlled cultivation of cannabis for medicinal and scientific purposes.
Ms Ley said the changes will deliver a safe, legal and sustainable supply of locally produced product for the first time.
The government will create a licensing scheme within the Department of Health to ensure cultivation meets international obligations.
That will be done in conjunction with state and territory laws that will be discussed at the next meeting of the Council of Australian Governments.
Ms Ley said the government is sympathetic to the suffering of those with debilitating illnesses.
The absence of a mechanism for safe, legal and sustainable supply means patients and researchers have turned to overseas supplies of medical cannabis.
"Allowing the cultivation of legal medicinal cannabis crops in Australia under strict controls strikes the right balance between patient access, community protection and our international obligations," Ms Ley said in a statement.
The move comes after New Zealand's outgoing CTU president Helen Kelly said she's going to ask Associate Health Minister Peter Dunne for an exemption to use cannabis oil as part of her treatment for cancer.
The union boss said cannabis oil relieved pain, and while she was not sure about its curative qualities, she was interested in research into them.
Ms Kelly was diagnosed with lung cancer in February. She said she had exhausted "all the normal medicines" and was "brassed off" that certain alternative remedies were not available.
Mr Dunne has said the New Zealand government will not be swayed by "emotional nonsense" colouring calls for wider access to medicinal cannabis.
He said there had only ever been one application for a dispensation to use cannabis products not registered in New Zealand - for Nelson teenager Alex Renton - which he had approved, and there were only a small number of pharmaceutical cannabis products which were at various stages of clinical trials
In Australia, Provision of legal cannabis to treat medical conditions appears to have broad community support.
The government envisages that medical cannabis will only be available to patients through a doctor's prescription or a medical trial.