Australia's Federal Government has now agreed to allow gay couples in the Australian Capital Territory to hold legally binding civil partnership ceremonies.

The Legislative Assembly passed a Greens bill earlier this month allowing gay couples in the Australian Capital Territory to recognise their relationship with a legal ceremony, but the Federal Government had signaled it would veto the legislation.

A compromise has now been reached, whereby same-sex couples can have their union recognised if they notify the registrar-general, reports ABC News.

ACT Attorney-General Simon Corbell says the agreement is a great step forward for marriage equality in Australia.

This locks in the role of ceremonies for same-sex couples," he explains.

"We have legal ceremonies and we have legal ceremony celebrants and that is a very important reform.

"This now opens the door for other states and territories to follow the ACT's lead knowing the Commonwealth accepts ceremonies are now a legal part of the equation."