Australia will take China to the World Trade Organisation over China's imposition of tariffs on the country's wine.
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China's anti-dumping duties on Australian wine have seen local industry exports plummet from about $1.1 billion to just $20 million.
"We believe that actions taken by the Chinese government have caused serious harm to the Australian wine industry," Trade Minister Dan Tehan told reporters on Saturday.
The duties slapped on wines produced in Australia range between 116 per cent and 220 per cent, with China confirming in March that the tariffs would remain for five years.
Mr Tehan acknowledged a WTO dispute could take between two and four years to resolve.
"What the Australian government would like is to be able to sit down and resolve this dispute directly with China - but if we can't, we are prepared to go through the process," he said.
The decision comes amid worsening relations with Australia's biggest trading partner.
Australia has already complained to the WTO over China's blocking of barley, one of several commodities that have become entangled in the growing rift between the countries.
Last week, Prime Minister Scott Morrison said G7 leaders shared the view that the world should avoid a Cold War with Beijing.
The decision to commence a dispute resolution process was taken following extensive consultation with Australian wine makers, a process available to all WTO members, Mr Tehan said.
Despite criticisms of the WTO dispute process in the past, Mr Tehan maintained he is confident the WTO could resolve the dispute.
It's the ninth dispute that Australia has taken to the WTO.
Australian Associated Press
