The federal Liberal government will honour a commitment to dairy farmers made by the former Conservative government.
The Harper administration said it would compensate Canadian dairy producers and processors for measures included in a comprehensive trade agreement with the European Union.
That agreement, which has yet to be ratified, would give the E-U tariff-free access for an additional 17,700 tonnes of cheese.
The Dairy Farmers of Canada says it represents about two per cent of domestic cheese consumption and more than double the current allotment.
In a joint statement, Agriculture Minister Lawrence MacAulay and International Trade Minister Chrystia Freeland stated discussions will begin later this month.