The Australian Space Agency has confirmed the bilateral agreement has come into effect and allows US space launches and recovery missions in Australia while protecting American technology.
The move could support as many as 100 spacecraft launches in Australia over the next 10 years, the agency told AAP.
The legal change followed a report that Elon Musk's company SpaceX had begun talks with Australian officials about recovering rockets off the nation's western or northern coasts.
The report, from Reuters, said SpaceX intended to expand its rocket-testing program and sought to launch rockets from Texas to deliver satellites to space and then be retrieved from Australian waters.
Last month, the aerospace company successfully landed the upper portion of its Starship rocket in the Indian Ocean.
SpaceX did not respond to requests for comment.
But an Australian Space Agency spokesman confirmed organisations had started talks about potential rocket launches after the US-Australian agreement was approved.
"The Australian Space Agency is currently engaging with domestic and international companies looking to explore opportunities," he said.
"It's estimated, with the agreement in place, spacecraft operators could supply up to 100 space launches over the next decade with a benefit to the Australian economy of $1 billion."
The spokesperson could not confirm talks with specific companies.
US rocket launches will be allowed under regulatory changes in the Technology Safeguards Agreement between the two countries, which was designed to "protect US technology launched in Australia and ensure that it remains under US control".
US officials signed the agreement in November last year but the changes were referred to Australia's Joint Standing Committee on Treaties for scrutiny and public consultation in February.
The committee recommended its approval in July after finding it could help to create highly skilled technical jobs and "would benefit the Australian space sector and provide opportunities for Australian companies".
The inquiry noted the global space sector was expected to grow from a value of $US464 billion ($A708 billion) in 2022 to $US1.1 ($A1.7) trillion in 2040.
10°C