Facebook has backtracked on its news ban less than a week after causing a nationwide stir by implementing an outright ban on Australian users sharing news links.

The announcement came on Tuesday afternoon with a statement from Facebook Australia and New Zealand Managing Director, Will Easton.

"We are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognise the value our platform provides to publishers relative to the value we receive from them," Easton said.

"As a result of these changes, we can now work to further our investment in public interest journalism and restore news on Facebook for Australians in the coming days.

Facebook's reversal happened a day after the Department of Health announced it would not use Facebook for paid advertising during the vaccine rollout unless the ban was lifted.

Speaking at a press conference on Tuesday, Treasurer Josh Frydenberg said the change of heart followed “intensive negotiations” in the days since Facebook’s news ban.

He said the government and Facebook had come to an understanding and the government would make changes to the News Media Bargaining code which is due to come into law soon.

“We have agreed to make some clarifications to the code when it comes to the designation process by the treasurer of a particular digital platform, a one-month notice period will be put in place,” he said

“The treasurer will also take into account not just the unequal bargaining position between the digital platform and the Australian news media businesses, but also the commercial deals that have been put in place and that digital platform’s commitment to supporting public-interest journalism in this country.”

The legislation will give the treasurer powers to designate digital platforms – namely Google and Facebook – that must then reach an agreement with Australian news platforms for the payment of news content shared on their services.

In a separate statement Facebook’s VP of Global News Partnerships, Campbell Brown, welcomed the government’s changes.

“The government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation,” he said.

“It’s always been our intention to support journalism in Australia and around the world, and we’ll continue to invest in news globally and resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers.”

As a senate committee was handing down its positive opinion on the code, Google had begun dealing with Australia's largest media companies including Seven West, Nine, and News Corp.

Facebook then made the not-so-surprising decision (it had already announced it in September) to ban all news from being shared by Australian Facebook users.

The move was widely condemned as Facebook also banned the Facebook pages of charity organisations and government services.