"If they prove to be good community members, good workers, then there is that possibility of a permanent residency pathway," Mr Tehan said.
Six local governments, led by Warrnambool City Council, lobbied the Federal Government for the deal.
Federal Minister for Immigration, Citizenship and Multicultural Affairs, David Coleman, said the Great South Coast region had been "calling out" for workers for some time.
Mr Tehan said in many cases businesses had advertised job opportunities Australia wide but had not been able to fill them.
"Those businesses were restricted in their growth and it was hurting the whole community," he said.
"It seems Australians don't want to do [the jobs].
"Our population growth hasn't been as strong as other areas … we've got to make sure we've got the workers to continue to grow."
Local workers still priority
The DAMA deal has been initially limited to a "moderate" 300 positions, most likely in the dairy and meat processing sectors, across the Glenelg, Moyne, Warrnambool, Corangamite, Colac-Otway and Southern Grampians shires.
Mr Tehan said employers were required to offer fours years of secure training, employment and engagement and support services would be made available in the community.
He said the number of positions could change depending on demand.