Australian Prime Minister Scott Morrison and his Japanese counterpart Fumio Kishida on Thursday signed a defence pact named Reciprocal Access Agreement (RAA) to facilitate joint exercises.
Both the leaders vowed to elevate bilateral security and defence cooperation further in "the interests of peace and stability in the Indo-Pacific region".
Japan only has such an agreement with the US, which it signed in 1960.
The joint statement, issued after the virtual meeting, underlined that the RAA will facilitate faster deployment of Japanese Self-Defence Forces and Australian Defence Force personnel and ease restrictions on the transportation of weapons and supplies for joint training and disaster relief operations.
The Australian Prime Minister described the RAA as a pivotal pact that will "form an important part" of the two countries' response to "the uncertainty we now face".
"This landmark treaty will underpin greater and more complex practical engagement between the Australian Defence Force and the Japanese Self-Defence Forces. It will, for the first time, provide a clear framework for enhanced interoperability and cooperation between our two forces."
The two countries had opened talks on the RAA in 2014 but signing of the pact was held up by an impasse over Japan's death penalty as Australia sought exemption for its military personnel from the death penalty for crimes committed in Japan.
However, Australia sidestepped the condition in an attempt to strengthen defence cooperation with the allies in the Indo-Pacific.
Australia and Japan also announced a joint committee to discuss the implementation process, including extradition of those involved in crimes.
The signing of the RAA comes after Canberra announced a trilateral alliance with the US and the UK – the AUKUS last September.
The alliance upset China, which said that AUKUS "seriously undermined regional peace and stability, intensified the arms race and undermined international non-proliferation efforts".