Qantas will use a plant oil biofuel to help power its Los Angeles-based aircraft.
The airline will buy 30 million litres of renewable jet fuel each year from United States based bio-energy company SG Preston - and will start using the biofuel from 2020.
The fuel will be used by Qantas aircraft from Los Angeles to Australia and follows a
successful domestic biofuel trial flights in 2012.
The fuel consists of 50 per cent renewable jet fuel produced from non-food plant oils, blended with 50 per cent traditional jet fuel.
In 2012 Qantas and Jetstar operated Australia's first biofuel trial flight on domestic flights using biofuel derived from used cooking oil, split with conventional jet fuel.
The announcement follows Virgin Australia's decision to lead a biofuel project in Brisbane.
Qantas International and Freight chief executive Gareth Evans said the partnership with SG Preston was part of the airline's commitment to lowering carbon emissions.
"Our agreement with SG Preston allows us to secure a supply for our Los Angeles based aircraft where we have a large fuel demand and where the biofuel industry is more advanced.''
He said the airline was also exploring renewable jet fuel opportunities in Australia and continued to work with suppliers to develop locally produced biofuels for aviation use.
Director of Environment for the International Air Transport Association Michael Gill said the agreement was a landmark.
"Deals such as these are critical to the development of an aviation biofuel sector globally and the achievement of the aviation industry's climate goals."
Renewable jet fuel is chemically equivalent to, and meets the same technical, performance and safety standards as, conventional jet fuel.
SG Preston's biofuel is produced from renewable plant oils, which do not compete with food production, the companies said.
US airline JetBlue signed a biofuel deal with SG Preston last year and Cathay Pacific is working with another US company to produce fuel from municipal waste.