Virgin Blue says its Sydney-Perth flights using wide-bodied Airbus A330 aircraft will start on Thursday, May 26.
Australia's number two carrier says the introduction of the new service marked the first time in almost a decade that travellers would have a choice for domestic business class in the local market.
"We will be offering very competitive fares on the new service, bringing competition back to business class travel, as well as continuing to provide great value in economy class," Virgin Blue chief executive John Borghetti said in a statement on Monday.
The inaugural A330 flight was scheduled to depart Sydney at 0800 AEST, with the return flight leaving Perth at 1300 AWST.
Virgin Blue said business class fares on the Sydney to Perth route would cost from $1399 one-way, booked on the internet.
A dummy booking on the Qantas website showed one-way business class airfares on flights leaving at a similar time were $1,445 one-way.
Virgin Blue said it would deploy the A330s once a day between Sydney and Perth between May 26 and June 5, with the frequency to double between June 6 and July 3.
The airline will use its A330s to fly three times a day - leaving Sydney at 0800, 1730 and 2000 AEST and departing Perth at 0545, 1230 and 2355 AWST - from July 4 onwards.
Virgin Blue had previously announced it would take delivery of two Airbus A330s - previously used by Emirates - this year, with two new A330s fresh off the production line, due to arrive in 2012.
At 1015 AEST, Virgin Blue was down half a cent at 31 cents.