An unlimited number of Australian and Chinese tourists will be allowed to travel between the two countries for the first time under a deal that has opened up the aviation market.

The previous cap of 33,500 seats a week applying to any airline flying between Australia and China has been removed after the nations signed off on the landmark agreement.

The Turnbull government says it will help local tourism businesses “take advantage of the largest and fastest growing consumer market in the world”, with more than 1 million Chinese tourists visiting Australia in 2015-16.

“These new arrangements will remove all capacity restrictions between Australia and China for each country’s airline, which is an important enabler for increased trade and tourism,” said Transport Minister Darren Chester, adding that the agreement had been one of his top priorities since being appointed to the portfolio.

“We have also liberalised traffic rights and code-share arrangements, which are important for Australian airlines,” he said. “This will enable Australian and Chinese airlines to service destinations between and beyond both countries.”

China was Australia’s second largest inbound market for short-term visitors last financial year — behind only New Zealand — and its citizens spent almost $9 billion during their stays.

Tourism Minister Steven Ciobo said the Chinese outbound market was expected to double to more than 200 million travellers annually in the next three years.

“This agreement will help Australia snare a larger slice of that, creating more Australian jobs and economic growth,” he said. “China is our most valuable tourism export market.”

Qantas said the deal would enable it to lay foundations for long-term growth in Australia-China aviation.

The national airline operates 35 return flights to Hong Kong and Shanghai each week and will increase that to 42 return services in the new year.