SkyAirWorld has won the right to fly between Darwin and Bali and is planning up to 14 flights a week.
The airline intends to start flying on the new route from February 16.
Jetstar will be the only airline flying directly to Denpasar when Airnorth stops flying the route.
Garuda Indonesia had intended to start a thrice-weekly flight to Jakarta in December, but the global financial crisis pushed backed these plans until later this year.
SkyAirWorld's applied to the International Air Services Commission in late December for unlimited capacity on the Darwin to Denpasar return route.
The airline intends to use its 76-seat Embraer E-170 or 94-seat E-190 jets to service the route.
SkyAirWorld already operates routes from Brisbane to Honiara, Cloncurry and Cairns.