Pro-Russian separatists remain in control of the site where Malaysia Airlines flight MH17 was shot down earlier this month and have restricted access to rescue teams and investigators.
Eastern regions are gripped by heavy fighting as Ukrainian government forces try to dislodge the separatists.
A statement issued by Prime Minister Najib Razak's office said the agreement with separatist leader Aleksander Borodai would "provide protection for international crash investigators" to recover human remains and ascertain the cause of the crash.
"It is imperative that we deploy a full team of investigators to ensure all the human remains are removed from the site, identified and repatriated," Najib said in the statement.
"We also need a full deployment of investigators to have unfettered access to the crash site so we can understand precisely what happened to MH17. I hope that this agreement with Mr Borodai will ensure security on the ground, so the international investigators can conduct their work."
He said "three grieving nations", referring to Malaysia, Australia and the Netherlands, had formed a police group to secure the site.
Among the 298 people who died aboard the Boeing 777 on its flight from Amsterdam to Kuala Lumpur on July 17 were 193 Dutch nationals, 43 Malaysians and 28 Australians.
Najib on Saturday said the separatists had fulfilled two of three conditions of a earlier deal struck - the return of victims' bodies and of the plane's two "black boxes" - and it was now time to proceed with the investigation.
Malaysian experts have said they believe at least 30 investigators will be required to cover the full site of the crash, in addition to Dutch investigators and an expert from the United Nations' civil aviation body, the ICAO.
The United States and other Western countries suggest the separatists downed the plane with a surface-to-air missile supplied by Russia. The separatists deny shooting down the plane and Russia says it has provided no such weapons.
POLICE TO MOVE IN
In the Australian capital Canberra, Prime Minister Tony Abbott said an unarmed police mission led by the Netherlands and made up of about 49 officers would travel to the site. Officials said a total of 170 Australian police were deployed in Ukraine.
"Our objective is to get in, to get cracking and to get out," Abbott, who has played a leading role in pressing for an investigation, told reporters in Canberra.
"This is a risky mission, no doubt about that, but all the professional advice I have is that the safest way to conduct it is unarmed, as part of a police-led, humanitarian mission."
Abbott said the force, including 11 Australians, would stay "as long as we can to do a thorough job" but he expected it would be no longer than three weeks.
Officials said the separatists had become more cooperative and Abbott said this reflected a general change in attitude.
"I think what's kicked in in recent days is our common humanity - our common feeling that this is dreadful beyond words," he said.
Officials in Ukraine said a group of Dutch police was already in the eastern city of Donetsk, which is under rebel control, while others were in the government-controlled city of Kharkiv, further west.
The Dutch Safety Board said last week it had taken control of an investigation into the crash and would coordinate a team of investigators from Ukraine, Malaysia, Germany, the United States, Britain, Russia and the ICAO.