"Today, the Hon Anthony Albanese MP, Prime Minister of Australia, and the Hon James Marape MP, Prime Minister of Papua New Guinea, signed the Agreement Between the Government of Australia and the Government of Papua New Guinea on a Framework for Closer Security Relations," the ministry said in a statement.
Australia will also provide Papua New Guinea with 200 million Australian dollars ($131 million) over a four-year period for security and policing needs, including the establishment of a police training center in Port Moresby and the modernization of the police force.
"In the event of a security-related development that threatens the sovereignty, peace or stability of either Party, or the Pacific region, the Parties shall consult at the request of either Party and consider whether any measures should be taken in relation to the threat," the agreement read.
The document does not prohibit Papua New Guinea from signing similar agreements with other nations.
Australian broadcaster reported that the agreement was reached with a view to "counter China’s growing military presence" in the Pacific.
Last month, Australia signed a security pact with the Pacific nation of Tuvalu, which was also described by the media as a measure to limit China's influence in the region.
Last year, China and the Solomon Islands, Papua New Guinea’s close neighbor, signed a defense pact allowing Beijing to send troops to the island nation in case of an emergency.