Prime Ministers Scott Morrison and Boris Johnson have reached an in-principle agreement for a free trade deal between Australia and the United Kingdom.

The two leaders met overnight in London and resolved outstanding issues for the long-running negotiations.

It is set to be the UK's first major post-Brexit trade deal.

Agriculture Minister David Littleproud said the UK and Australian governments were still "nutting out the details" of the deal, and a formal announcement would be made tonight Australian time.

There had been disagreement between the two countries over Australian agricultural exports, and requirements for British backpackers to work in Australia.

Mr Littleproud said a deal had been struck to make sure any drop in UK backpacker numbers, which is usually about 10,000 people a year, would be replaced through other "mechanisms".

"This is subsequent to the Free Trade Agreement," he said.

"We have an agreement that the National party will be able to secure those workers that would otherwise have come and actually build and actually get greater capacity."

A statement from Trade Minister Dan Tehan said the agreement was a "win for jobs, businesses, free trade and highlights what two liberal democracies can achieve while working together".

Mr Tehan also recently travelled to London to hold preliminary trade talks with his UK counterpart Liz Truss, with the pair agreeing there would be an in-principle deal by June.

Speaking before the agreement was reached, Finance Minister Simon Birmingham — who oversaw initial negotiations as former trade minister — said it would be a big win for farmers and small businesses.

"It will only be done if it's a good deal for Australia, and crucially in that sense is making sure that our farmers and agriculture sector get the type of export access, along with other small businesses that we expect in a trade agreement to truly open up markets and flow between two nations," Senator Birmingham said.

"If we can get back to a position where we have substantial elimination of tariffs and quotas for Australian goods, as well as an opening up of services markets, then it does provide access to a very significant, very high value market in the UK."

Prior to entering the European common market in 1973, the UK was Australia's most lucrative trading market.

In 2018, the UK was Australia's eighth-largest two-way trading partner, worth $26.9 billion.

The president of the National Farmers Federation, Fiona Simson, has previously said that the "volume of Australian red meat to the UK, in the context of the UK's total red meat imports and Australia's total exports, is very, very small".