Australia has decided to join AIIB: PM

Australia has decided to sign a Memorandum of Understanding on the Asian Infrastructure Investment Bank (AIIB), which would allow Australia to become a founding member of the bank, said a statement released by Prime Minister Tony Abbott Sunday morning.

In the carefully worded joint statement with Foreign Minister Julie Bishop and Treasurer Joe Hockey, Abbott said the signing of the MOU will enable Australia "to participate as a prospective founding member in the negotiation of setting up the bank".

"The Government has discussed the AIIB extensively with China and other key partners inside and outside the region," the statement said.

"Good progress has been made on the Bank's design, governance and transparency over the past few months, but we still have issues that we will address through ongoing consultations."

March 31 is the deadline for countries willing to join the Bank as a founding member to flag their intention. Australia's announcement is well anticipated as senior government officials have been talking about the possibility of Australia joining the AIIB ever since the UK made clear its intention to join on March 12.

"Recognising the pressing need for infrastructure investment in the Asia-Pacific, Australia made infrastructure a priority during our G20 presidency in 2014," the statement said.

"Working with other key multilateral institutions such as the World Bank and the Asia Development Bank, the AIIB has the potential to play a valuable role in addressing infrastructure needs and boosting economic growth in the region with potential benefits for Australia."

The statement also said key matters to be resolved before Australia considering joining the AIIB included the Bank's Board of Directors having authority over key investment decisions, and no one country controlling the bank.