In a speech in Tokyo, Mr Obama said the US was committed to engaging with the eight-country Trans Pacific Partnership to work on shaping a regional agreement.
It was reported he would seek Chile, New Zealand, Singapore and Brunei to form a Trans-Pacific, regional free-trade agreement.
In the spirit of renewed commitment, Mr Obama had a short meeting with Mr Key at a dinner they were both attended during the weekend in Singapore.
Mr Key said there was a "real commitment" from the US now.
Negotiations were expected to start overnight (NZ time) and an agreement could be in place by 2011, he said.
Agriculture was expected to be included in any agreement.
"It would give us a FTA with China, a FTA with the US, as well as many other countries and if you put it in that perspective it really positions New Zealand brilliantly for growth in the next 10-20 years," Mr Key told Radio New Zealand.
As well as the United States, Australia, Peru and Vietnam have expressed interest in joining.
Trade Minister Tim Groser said Mr Obama's announcement brought the "long-held goal" of a free trade deal with the US closer.
Meanwhile, leaders, including Mr Key and Mr Obama, at the Apec summit in Singapore attended a meeting on climate change.
Apec leaders have agreed to a watered down version of emissions reduction targets in their final statement.
They pledged a 50 percent emissions reduction by 2050 and instead have agreed to "substantially" cut carbon pollution by then.
