President Prabowo Subianto said the new treaty reflects a "firm commitment to the good neighbour principle" and Indonesia's "free and active" foreign policy.

"We believe that this agreement will be one of the important pillars for stability and cooperation in our region," Prabowo said.

The pact will facilitate defence initiatives that include embedding a senior Indonesian officer within Australia's defence force, Prime Minister Anthony Albanese said in a joint statement after the signing in Jakarta.

Australia will also support the development of military training facilities to boost Indonesia's ability to conduct joint drills, he said.

The pact, the full details of which have not yet been disclosed, was first announced in November when Prabowo visited Australia. 

Canberra has been seeking to bolster its military power in the Asia-Pacific region to counter China's growing influence.

Indonesia has proven more cautious with its foreign policy, not wanting to be seen taking sides and upsetting Beijing, its biggest trading partner.

Albanese hailed the agreement as "a historic moment in our nations' relationship".

"Australia and Indonesia share one of the world's longest maritime boundaries, which naturally makes us close partners. But today, we are more than just partners, we are close friends," he added.

Albanese is on his fifth official visit to Indonesia, which is due to conclude Saturday.

He had described the treaty as a "major extension of our security and defence cooperation" and praised Indonesia's growing investment in Australia.

The treaty builds on a 2024 defence pact, which pledged closer cooperation in the contested Asia-Pacific region.

Thousands of Indonesian and Australian troops held joint drills in eastern Java months after the 2024 accord was signed.

The treaty signed on Friday was modelled after a 1995 security agreement between the two countries, Australia's Foreign Minister Penny Wong has said. 

The 1995 deal was withdrawn in 1999 after Australia led a United Nations peacekeeping force in East Timor, which had plunged into violence as it sought independence from Indonesia.

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