Jetstar will launch flights from Sydney and Melbourne to Ho Chi Minh City, linking to Vietnamese domestic partner Jetstar Pacific.
Jetstar Pacific, a 70/30 joint venture between Vietnam Airlines and Jetstar parent Qantas Airways, is growing rapidly in an attempt to fend off a competitive threat from domestic budget rival VietJet.
"The growing middle class in Vietnam has made it one of the fastest growing aviation markets in the world," Jetstar Group Chief Executive Jayne Hrdlicka said in a statement.
She said the new flights from Australia to Vietnam, which begin in May, would link up to 15 Jetstar Pacific domestic destinations from Ho Chi Minh City.
"Vietnam has the potential to become as popular as Bali or Thailand for Australian travellers," Ms Hrdlicka said.
"In the last 12 months, there has been a 21 per cent increase in visitors from Vietnam to Australia and we expect to see that increase with the introduction of our low fares on the route."
Vietnam Airlines and Qantas last year said they would invest $139 million to more than double the size of Jetstar Pacific's fleet to 30 aircraft by 2020.
The CAPA Centre for Aviation has said that VietJet commands 40 per cent of Vietnam's domestic market and it will likely surpass Vietnam Airlines this year as the country's biggest domestic carrier.
Jetstar's non-stop flights from Australia to Vietnam will break a monopoly held by Vietnam Airlines and will compete against one-stop offerings from rival low-cost carriers AirAsia X and Singapore Airlines' Scoot arm.
To celebrate the launch, Jetstar will be offering seats for sale at $159 one-way in a 12-hour sale starts at midday on Thursday.
See also: Cathay Pacific fares to Europe for $1084