Canadian Forces Northern Area troops raise a Canadian flag on Hans Island on July 13, 2005. (CP file photo)

Canada and Denmark have agreed to negotiations over the ownership of a small Arctic island that has been the subject of a recent territorial dispute, Copenhagen says.

The foreign ministers of Canada, Denmark and Greenland will meet in September to discuss the fate of Hans Island, Danish Prime Minister Anders Fogh Rasmussen said on Monday.

Both Canada and Denmark have claimed the 1.3-square-kilometre island, which lies off the northwest coast of Greenland.

The debate flared in July when Defence Minister Bill Graham landed there and erected a Canadian flag. Last week, Copenhagen said that a warship was carrying officials to the island to plant a Danish flag.

Hans Island is a tiny and frozen outcrop of rock. However, it's taken on increased importance because of concerns that global warming has made the Northwest Passage more accessible to shipping, as well as opening the area up to mining, fishing and drilling for oil and gas.

The debate over its ownership has simmered since the two countries signed an agreement delineating a maritime border between them in 1973.

Canada and Denmark agreed in 1973 to create a border through Nares Strait, halfway between Greenland, a semi-autonomous Danish territory, and Canada's Ellesmere Island.

But they were unable to agree which country would have sovereignty over Hans Island, which lies about 1,100 kilometres south of the North Pole, and various other Arctic islands in the area.

In the end, they decided to work out the question of ownership later.

The decision has caused friction more than once. In 1984, Denmark's minister of Greenland affairs raised a Danish flag on the island.

He then buried a bottle of brandy at the base of the flagpole and left a note saying "Welcome to the Danish island."