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Perth will host the next Commonwealth Heads of Government Meeting (CHOGM) in 2011, Foreign Affairs Minister Stephen Smith has told parliament.
The CHOGM in Trinidad and Tobago, attended by Mr Smith and Prime Minister Kevin Rudd, agreed to Australian hosting their next gathering.
'This is a welcome decision,' he said.
Australia previously hosted CHOGM in 1981 (Melbourne) and in 2002 (Coolum).
'This does draw important attention to the fact that Australia, from Perth, is an Indian Ocean rim country and Perth is an Indian Ocean rim capital,' Mr Smith said.
Perth was an appropriate city to host the event, as it was now one of Australia's fastest-growing cities.
Mr Smith said Australia would also join the Commonwealth ministerial action group, to which Ghana, Namibia and New Zealand were current members.
The group administers the commonwealth's affairs on an ongoing basis.
The opposition's foreign affairs spokeswoman Julie Bishop congratulated Mr Smith on his 'persuasive advocacy' at CHOGM.
The decision to hold the 2011 meeting in Perth was an opportunity to showcase the city as one of the world's great energy-efficient cities, she said.
Ms Bishop said the issue of the next CHOGM had not been without its controversy and commended the government for agreeing to allow Sri Lanka to host the 2013 CHOGM.
'As to the future of the commonwealth, that is obviously a matter to be discussed at the meeting in Perth,' she said, referring to a recent report that had questioned its relevance.
'The challenge for the leaders of the commonwealth nations will be to show that it has an agenda that is relevant to not only the commonwealth nations, but to the globe generally.'
WA Premier Colin Barnett says his state will be the centre of world political debate when Perth hosts CHOGM.
Mr Barnett said it was great news for the state.
'I think it will just show off Western Australia (Perth) as a very vibrant city... ' Mr Barnett told ABC Radio.
An unusual set of circumstances led to Perth being named as the host city, Mr Barnett said.
He said the meeting was to be held in Sri Lanka but because of the civil unrest Foreign Minister Stephen Smith had approached him to see if Perth could be a possible host in the event the troubled nation could not host it.
Mr Barnett said the Queen was expected to be a part of proceedings.
'For that week in two years time we will be very much at the centre of world political debate,' he said.
WA police would work with the Australian Federal Police on security issues.
A significant number of developing nations would attend the meeting, Mr Barnett said.
'This is going to be very important for our position as the Australian city on the Indian Ocean,' he said.
