The British government sees the deal as an important piece of its post-Brexit trade and diplomatic strategy to shift the country's economic center away from Europe and seek out new opportunities in higher-growth Indo-Pacific nations.
Australian Prime Minister Scott Morrison and Johnson overcame sticking points during talks after the Group of Seven meeting in Britain over the weekend, which Morrison attended as a guest.
Though details have yet to emerge, some official estimates say the agreement could add 500 million pounds ($705.7 million) to British economic output over the long term - a small fraction for an economy worth around 2 trillion pounds.
Nevertheless, it was hailed as an important stepping stone as Britain develops its own trade policy for the first time in decades following its departure from the European Union.
The deal will be scrutinised by British farmers, who fear they could be forced out of business if the deal eliminates tariffs on lamb and beef imports from Australia. The government said British farmers would be protected by a cap on tariff-free imports for 15 years.