China and 20 other countries signed a memorandum last October of understanding to establish the Beijing-headquartered US$50 billion Asian Infrastructure Investment Bank (AIIB) bank.
Britain, France, Germany and Italy have also announced plans to join.
But Washington has voiced concern about whether the bank would meet international governance, environmental and social standards.
The institution is expected to address the region’s burgeoning demand for transportation, dams, ports and other facilities and is seen as a potential rival to US-based institutions such as the World Bank.
Abbott said his government had approached China, Australia’s largest trading partner, about how the bank would be governed and would be making an announcement soon.
“We have been talking to the Chinese to try to ensure that it is in fact a multilateral institution, that it is run in all important respects by a board, that its processes are transparent, that it is genuinely accountable and that it is not controlled by any one entity,” the prime minister told parliament.
“Under those circumstances we would certainly be prepared to join.”
Abbott said he had several conversations with US President Barack Obama and Japanese Prime Minister Shinzo Abe about the AIIB.
The bank has support from countries including India, Singapore, Malaysia, Cambodia, Pakistan, the Philippines, Uzbekistan and Vietnam.
Abbott’s comments came days after International Monetary Fund (IMF) head Christine Lagarde said during a visit to China that she welcomed the AIIB’s establishment.
She added that the IMF would be “delighted” to cooperate with it.
World Bank managing director Sri Mulyani Indrawati has also hailed the AIIB, telling China’s official news agency Xinhua: “Any new initiative that will mobilise funding in order to fill the infrastructure gap is certainly welcome.” -AFP