Sources told AAP the agreement was all but finalised, with European Commission President Ursula von der Leyen expected to travel to Australia within a week to seal the deal.
But the outstanding issue of market access for Australian meat products remain, and will have to be negotiated between Ms von der Leyen and Prime Minister Anthony Albanese during high-level talks.
Trade Minister Don Farrell described a virtual meeting on Monday evening with his EU counterpart Maros ‌Sefcovic as "productive".
"I am confident we can do a deal, and look forward to continuing to work with him to reach an agreement that is in Australia's national interest," he said.
Australia and the bloc have unsuccessfully tried to reach an agreement for the past decade, as talks eventually stalled following rounds of negotiations.
Senator Farrell has walked away from discussions multiple times, over the key sticking point of greater quotas for beef and sheep exports to a European market of 450 million people.
Mr Sefcovic said it was valuable to speak with the trade minister to track the "good progress" being made in the negotiations.
"We are working hard towards a mutually beneficial agreement for all stakeholders," he wrote in a statement on social media platform X.
"Moving in the right direction and fully committed to a successful outcome."
The latest impasse has lasted since 2023 when discussions last fell over.
Negotiations kicked off again last month when Senator Farrell travelled to Brussels, where significant progress for an agreement was made.
Europe has tried to protect domestic farmers who oppose greater competition from imports.
Australian farmers have also repeatedly urged the federal government to walk away from a deal that doesn't secure beneficial market access.
Ireland's ambassador to Australia Fiona Flood, whose nation's farmers were particularly reluctant to compete with Australian products, said both sides want to see the issue "concluded soon".
"We can all be very hopeful that in these turbulent times, it's a beacon of hope that we can close that trade deal," she told ABC Radio.
The push for a free trade agreement has been renewed in the face of tariffs imposed by the US and the disruption to the ruled-based framework by the Trump administration.
The upset to trade in the Middle East as a result of the US-led war on Iran has also helped create the environment for an agreement to be reached.
The European Union signed a deal with India in January, as nations across the globe attempt to reduce their reliance on the US.
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