It is the latest of 22 nuclear safeguard agreements covering 39 countries, including the US, Russia, Korea, UK, Canada, Argentina and China. It is the second in the Middle East after Egypt.
"We are very, very happy that the UAE has fulfilled all the conditions and requirements that we would seek of a partner," Senator Carr told ABC Radio on Thursday.
Although rich in oil, the UAE has opted for nuclear for domestic power generation and in July became the first country in more than two-and-a-half decades to begin building a maiden nuclear power plant.
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Senator Carr said the agreement allowed a comprehensive range of safeguards to ensure Australian nuclear material was not used for anything but peaceful purposes.
"There is a very strong guarantee and that is that it's in the interest of the UAE to stick to what they have committed themselves to do," he said.
Supply of Australian uranium would cease if the UAE started to enrich it, or gave it to a third party, or announced it was going to use the uranium for a nuclear warfare capacity.
Senator Carr said Australia, as a uranium supplier, had an obligation to sell to countries that adhered to all the rules, delivered on all the safeguards and were committed to non-proliferation.
"If we don't provide uranium to such countries, then we are not providing an incentive to play by the rules," he said.
Senator Carr said he did not believe there was any appetite in Australia for a debate on a domestic nuclear energy program. "And I'm not going to initiate it," he said.
Senator Carr once endorsed nuclear power but said such views were expressed before joining the federal government. "And you will only get from me an expression and a defence of Australian government policy," he said.
