Australia will sign a new defence and security treaty with Indonesia in the interest of "common security".
Prime Minister Anthony Albanese said the treaty will commit both nations to consult each other on matters of security, at both the leader and ministerial levels, on "a regular basis".
"This treaty is a recognition from both our nations that the best way to secure that peace and stability is by acting together," he told reporters on the deck of Australian Navy ship HMAS Canberra in Sydney on Wednesday afternoon.
Standing beside Indonesian President Prabowo Subianto in matching caps, Albanese said the treaty represented a "major extension of our existing security and defence cooperation".
Both parties have committed to consulting each other in "adverse challenges" or "common security interests", considering joint measures where appropriate.
SBS News understands that the treaty was first pitched by Albanese in May, during his first overseas trip after being re-elected, with half a dozen subsequent secret meetings to draft the deal since.
It builds on the 2006 Lombok Treaty and the Defence Cooperation Agreement signed last year.
Prabowo commended Australia as a "good neighbour", stating the treaty reaffirmed Indonesia's determination to "enhance and guarantee the security of both our countries".
"Good neighbours will help each other in times of difficulties and in the Indonesian culture we have a saying when we face an emergency: 'it is our neighbour that will help us'," he said during his first official visit to Australia as president.
Why is a new Indo-Australian treaty significant?
The announcement is pivotal due to Indonesia's long history of non-alignment.
Foreign Minister Penny Wong says the new treaty will be closely modelled on a short-lived security agreement signed by then Prime Minister Paul Keating and former Indonesian president Suharto in 1995.
The agreement included "alliance-like obligations" and was the first bilateral agreement signed by Indonesia.
However, it fractured in the late 1990s due to Australia's involvement in peacekeeping during the East Timorese crisis.
Albanese has repeatedly stressed that Indonesia is an important economic partner, but the treaty development strengthens security ties with the neighbour.
Wong said the treaty reflects a close "friendship, partnership and deep trust" with Australia, with the deal expected to be inked early next year.
"Australia and Indonesia both benefit from each other’s stability and sense of security," she said in a statement.
It also comes as a surprise following Indonesia's reaction to Australia signing the Pukpuk defence treaty with Papua New Guinea last month.
Indonesia's foreign ministry spokesperson Vahd Nabyl said it was paying "close attention" to developments in the region, urging the two nations "uphold the sovereignty and independence" of Indonesia.
"Indonesia respects every country's right to enhance its defence systems," Nabyl said.
"And believes that any such cooperation should contribute to peace and stability in the region, while avoiding the escalation of geopolitical rivalry."
The Pukpuk Treaty, named after the local word for crocodile, includes a mutual defence pact that commits either nation to helping the other in the event of an armed attack.
The treaty will elevate this ongoing commitment, providing closer military integration and consultation and investment in modernising the PNG defence force, as well as giving up to 10,000 PNG nationals a pathway to serve in the Australian Defence Force.
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