A joint statement made by Treasurer Josh Frydenberg and Communications Minister Paul Fletcher on Tuesday said the "world-leading binding code" would "address the bargaining power imbalance between news media businesses and digital platforms".

“This is a huge reform, this is a world first and the world is watching what happens here in Australia,” Frydenberg told the media in Canberra.

“Our legislation will help ensure that the rules of the digital world mirror the rules of the physical world … and ultimately sustain our media landscape.”

As already reported, the government has given ground on a number of issues, among them the time interval for informing publishers about algorithm changes; that digital platforms will be able to factor in the value of the service they provide to a news organisation in monetary terms before the quantum of payment is decided and also that the law will only apply to Google Search and Facebook's NewsFeed.

The code will be passed into law after it is reviewed by a parliamentary panel in 2021.

The code is claimed to support a diverse and sustainable Australian news media sector, including Australia’s public broadcasters, by:

• encouraging the parties to undertake commercial negotiations outside the code;
• enabling digital platforms to publish standard offers, which provides smaller news media businesses with an efficient pathway to finalising agreements with digital platforms;
• establishing a negotiation framework under the Code that allows both parties to bargain in good faith and reach binding agreements;
• ensuring that an independent arbiter is able to determine the level of remuneration that should be paid under a fair and balanced final offer arbitration model should the parties be unable to reach agreement; and
• setting clear and workable minimum standards for digital platforms including requiring 14 days advance notice of deliberate algorithm changes that affect news media businesses.

The statement said the code would initially cover only Facebook's NewsFeed and Google Search.

"Other digital platform services can be added to the code in future if there is sufficient evidence to establish that they give rise to a bargaining power imbalance," the statement said.

"The code will be reviewed by Treasury one year after its operation to ensure it is delivering outcomes that are consistent with the government’s policy intent."

Facebook Australia managing director Will Easton said the company would review the legislation and “engage through the upcoming parliamentary process with the goal of landing on a workable framework to support Australia’s news ecosystem”.

Google has declined to comment, saying it had yet to see the final version of the code.