CANBERRA, March 29  -- Australia has decided to sign a Memorandum of Understanding on the Asian Infrastructure Investment Bank (AIIB), which would allow Australia to become a founding member of the bank, Prime Minister Tony Abbott said on Sunday.

In a joint statement with Foreign Minister Julie Bishop and Treasurer Joe Hockey, Abbott said the MOU will enable Australia " to participate as a prospective founding member in the negotiation of setting up the bank."

"The government has discussed the AIIB extensively with China and other key partners inside and outside the region," the statement said.

"Good progress has been made on the bank's design, governance and transparency over the past few months, but we still have issues that we will address through ongoing consultations."

March 31 is the deadline for countries willing to join the China-proposed AIIB as a founding member to flag their intention. Australia's announcement is well anticipated as senior government officials have been talking about the possibility of Australia joining the bank ever since the UK made clear its intention to join on March 12.

"Recognizing the pressing need for infrastructure investment in the Asia-Pacific, Australia made infrastructure a priority during our G20 presidency in 2014," the statement said.

"Working with other key multilateral institutions such as the World Bank and the Asia Development Bank, the AIIB has the potential to play a valuable role in addressing infrastructure needs and boosting economic growth in the region with potential benefits for Australia."

The statement also said key matters to be resolved before Australia considers joining the AIIB include the Bank's Board of Directors having authority over key investment decisions, and that no one country control the bank.

The Asian Development Bank estimated that there is an 8- trillion-U.S. dollar deficit in Asia's infrastructure fields, including transport, energy and telecommunication.

It was reported that Australia could invest up to 3 billion AU dollars (2.3 billion U.S. dollars) in the bank, which could lead to a wave of infrastructure development across the Asia-Pacific.

Peter Drysdale, head of ANU's East Asian Bureau of Economic Research, said Australia and other economies throughout the region "will benefit greatly from investment through the AIIB, directed, as it is intended, towards productive investment in infrastructure that is essential to sustaining regional growth."

"There is no question that Australia should be among the founding members of AIIB. That is consistent with Australian efforts to work with China to contribute to the establishment of this new multilateral facility for infrastructure investment in the region and beyond," he wrote in a written interview with Xinhua earlier this month.

"AIIB can play an important role in national projects around the region, including in Australia. It can play a particularly important role in projects, such as transportation infrastructure across the region, that straddle a number of regional economies."