The date has been agreed on in a breakthrough meeting between the PNG central government and Bougainville's regional government co-chaired by PNG prime minister Peter O'Neill and Bougainville president John Momis.
Under the terms of the Bougainville Peace Agreement, a referendum must be conducted in Bougainville before mid-2020.
President Momis said that although the date could not yet be finalised, due to various legal steps required to be taken first, it would be impossible to plan the referendum without a target date.
"As a result, there should no longer be any doubt amongst Bougainvilleans about whether or not the referendum will be held," said Mr Momis.
He said that Bougainville could now plan the steps required to hold the referendum as well as the time, funding and personnel needed to carry out each step.
Mr Momis said that equally pleasing was a national government commitment to provide the funding needed to carry out referendum preparations beginning with the 2017 national budget.
Recently, Mr Momis had expressed frustration that his administration had not been given funds committed to Bougainville by Waigani under the Peace Agreement.
Admitting that court action remained an option, he wrote to Mr O'Neill two months ago to remind him that Bougainville was owed hundreds of millions of dollars in constitutionally guaranteed funding.
However the latest meeting of the joint supervisory body has set the ball rolling on the referendum and related programmes, much to Mr Momis' relief.
'Huge step forward'
Mr Momis said he was "very pleased" with the decisions made with Waigani after their series of meetings over recent months.
The Bougainville and PNG governments have agreed to establish an independent agency to conduct the referendum, a detailed work programme of activities and associated funding; and a set of basic messages for an initial joint awareness programme.
The two governments are reportedly committed to establishing the independent agency which willl conduct the referendum before the end of 2016.
PNG's Electoral Commission and the Bougainville Electoral Commission were already cooperating to develop the agreement, administrative arrangements and the charter required by the peace agreement for establishing the independent agency.
"The joint agreement on these and related issues is a huge step forward," said Mr Momis.
He said it demonstrated once and for all the total commitment of PNG to full implementation of the Bougainville Peace Agreement and the associated constitutional provisions.
"I know some factions and individuals have retained weapons because of suspicions that the national government would refuse to hold the referendum," Mr Momis admitted.
"But with the historic Joint Supervisory Body decisions on 20 May, those suspicions must end.
"As a result, all Bougainvillean groups must now work towards achieving complete weapons disposal."
The president called for full disposal of weapons by the Me'ekamui Defence Force elements, the armed groups associated with Noah Musingku at Tonu, and various former Bougainville Revolutionary Army and Bougainville Resistance Force members and groups that have retained weapons.
"Only with full weapons disposal will Bougainville be referendum-ready. The Bougainville Peace Agreement requires that the referendum be free and fair," he said.
Commending Peter O'Neill for showing leadership on this process, Mr Momis said that PNG was providing a model for other countries that have experienced violent conflict and look to resolve it peacefully.