Immigration Minister Peter Dutton has signalled he is willing to compromise on the Turnbull government's tough foreign labour regime, assuring universities they won't be hamstrung by new work experience requirements.
Vice-chancellors, academics and the powerful Group of Eight universities were alarmed the Turnbull government's abolition of the 457 visa may prevent them hiring overseas researchers straight out of a PhD program.
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457 visa: bad news for goat farmers
Antique dealer, jockey and judge are just some of the occupations now unavailable to foreign workers after the Turnbull government announced the abolition of the 457 visa program.
In a letter to Prime Minister Malcolm Turnbull, Go8 chairman Peter Hoj warned the changes could be "extremely damaging" to Australia's reputation for welcoming international academics.
Particular concern surrounded the introduction of a two-year work experience prerequisite for temporary work visas, which universities feared would stop them hiring researchers who had spent their adulthood studying.
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A spokeswoman for Mr Dutton told Fairfax Media it was not the government's intention to stop universities bringing talent into the country, and the new rules would be flexible.
"Universities will continue to be able to attract the best and brightest minds from Australia and the world," she said.
"The government recognises that work experience may take different forms for different occupations, such as research and teaching experience accumulated by PhDs.
"The government will work with the university sector to define what constitutes work for this cohort."
Belinda Robinson, chief executive of peak body Universities Australia, welcomed the development and said high-level talks with the government indicated it was prepared to compromise.
The election of Donald Trump as US President, and the fallout from Brexit, have prompted scores of overseas academics to express interest in moving to Australian universities.
Ms Robinson said it was "absolutely crucial" Australia stood ready to exploit "the window of opportunity that we have" to attract new talent.
"We want to encourage them, not deter them," she said.
Sydney University quantum physicist Michael Biercuk, who came to Australia on a 457 visa and has been a vocal critic of the changes, said the newfound flexibility was "a great first step in alleviating our concerns".
The other major sticking point with universities is the government's intention to exclude the job of university lecturer from a rebadged Medium and Long-Term Strategic Skills List.
That means from March next year academics would be ineligible for a four-year temporary work visa and the popular Employer Nomination Scheme, which grants successful applicants permanent residency in Australia.
The lure of permanent residency was a vital incentive for senior academics who were interested in working at Australian universities, the sector has told the government.
Vicki Thomson, chief executive of the Go8, said this needed to be fixed quickly "so as not to send the wrong signals into the global market place".
Earlier in the week Mr Dutton said temporary work visas, including for university lecturers, must target areas where there was a genuine skill shortage in Australia.
"Hopefully that lecturer then provides a passage of those skills to people under the lecturer and we train up and provide more support around training a local workforce," he told ABC Radio.
"So that when the position is next advertised or when we need to expand that business or that employment arrangement at the university, we can have those people that have been locally trained."