Nauru's government says Australia's Bendigo and Adelaide Bank has signed a deal to set up an agency on the island.
The finance minister, David Adeang, says it's a major step forward for Nauru, a country heavily reliant on cash.
The agency will open in Nauru's Revenue Office when logistical issues and staff training are addressed.
Bendigo Bank's executive of community engagement, Robert Musgrove, says Nauru has been without banking services for 15 years and it's especially pleasing to be able to offer them.
Nauru's President, Baron Waqa, says the government has provided the infrastructure and underwritten the costs of operating the agency, but has no input or control over business operations.