The Philippine government and Muslim rebels said Tuesday they were optimistic of clearing the final hurdle to ending a deadly decades-old rebellion, ahead of a fresh round of talks in Malaysia.

The Kuala Lumpur negotiations on Wednesday will tackle a "normalisation" deal detailing how the rebels will hand over their weapons, and the creation of a security force to police what would be a Muslim self-rule area, they said.

"We are optimistic... we know that the (rebels are) also optimistic and we're happy that we're moving faster and moving forward to a final resolution," Jose Lorena, a junior minister who advises President Benigno Aquino on the talks, told AFP.

"Both sides now have a general idea of where they want to go, and it will just be a matter of refining all the details."

This is the last of four power-sharing accords that must be agreed between the government and the Moro Islamic Liberation Front (MILF) rebels, before a final peace deal can be signed.

Aquino hopes to secure a final peace settlement before leaving office in mid-2016.

But he warned last month that disarming the MILF would be a "heavy and contentious" issue.

MILF vice chairman Ghazali Jaafar was also upbeat about the negotiations.

"There is already an understanding on most of the issues that will be contained in the normalisation annex -- I would say 90 percent," he told AFP.

He said the toughest part would be creating the region's police force, and detailing how it would interact with the Philippine National Police.

"I would say this would also be difficult because the discussion revolves around the security of the Bangsa Moro people (Filipino Muslims) and other residents of the Bangsa Moro (autonomous region)," Jaafar added.

Muslim groups have waged a rebellion since the 1970s. The insurgency has left some 150,000 people dead and parts of the southern Philippines mired in deep poverty and instability.

Apart from the MILF, many other armed groups operate in the south, including former rebels who had resorted to banditry and terrorism.

The situation has left parts of the southern Philippines mired in deep poverty and instability.

Amid deadly attacks there by other Muslim groups opposed to the talks last year, the two sides signed three other preliminary deals, including splitting revenues and power-sharing between the autonomous region and the national government.

Lorena said a commission of Filipino and foreign experts has been meeting separately over the past few months to advise the negotiators on the creation of a security force for the area.

The proposed deal would also govern the deployment of Philippine military forces there, he and Jaafar added.