The head of the European Union's executive branch landed in Sydney on Monday, where she met Governor-General Sam Mostyn at Admiralty House and was welcomed with an Indigenous smoking ceremony.
It's the first day of a three-day visit to Australia by the president, which is expected to culminate in the final points of a trade deal being agreed to.
The deal has been years in the making, with naming products such as cheese and wine among the sticking points.
Trade Minister Don Farrell and his European counterpart Maros Sefcovic discussed the free-trade deal on Monday.
Previous negotiations have fallen apart largely because of disagreements over the agriculture sector.
The Australian side wants meat producers to be allowed to sell more of their product to the European market - a push resisted by EU negotiators who want to protect their farmers from increased competition.
Some farmers are likely to be disappointed with the level of access to European markets locked in by the deal, but the two sides have made positive progress, a source close to the negotiations who was not authorised to speak publicly told AAP.
Europe had also sought to strip Australian farmers of the right to use geographic naming indicators such as feta, parmesan and prosecco.
A compromise on the dispute is expected to be reached.
The deal is likely to be signed off on Tuesday following talks between Ms von der Leyen and Prime Minister Anthony Albanese in Canberra.
"This is a milestone moment for the relationship between Australia and the European Union, such an important relationship," Mr Albanese told parliament.
"Two-way trade is worth some $109 billion that represents jobs and economic prosperity and our government has been working constructively to take that to the next level."
Ms von der Leyen will become the first female foreign leader to address the federal parliament.
The trade deal would give Australian exporters better access to a market of 450 million people, Mr Albanese said.
"Agreement with Europe would, of course, strengthen that even further, but as well, we need to engage with Europe on matters of security," he said.
The drive for an agreement showed Europe and Australia were pushing back against US President Donald Trump's overturning of traditional trade systems, former Australian trade official Prudence Gordon said.
"The fact that Australia and the EU are negotiating this trade agreement now really signals their efforts to counter the chaos created by Donald Trump," the executive director of the Australian Centre for International Trade and Investment told AAP.
Mr Albanese has sought to frame the deal as a win for Australian exporters who could rake in an extra $10 billion annually.
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