The Chinese People's Liberation Army's deputy chief of staff, Lieutenant General Wang Guanzhong, on Monday had talks with Australia's Defence department secretary Dennis Richardson and acting Defence Force chief Air Marshal Mark Binskin.
During the dialogue both nations endorsed the Australia-China Defence Engagement Action Plan, a Defence statement said.
The plan will mean further co-operation in maritime engagement, strategic policy discourse, educational exchanges and practical exercises, as well as reciprocal high-level visits.
The talks come months after Foreign Minister Julie Bishop drew China's ire for criticising the country's announcement of a new Air Defence Identification Zone (ADIZ), which covers a string of disputed islands claimed as Senkaku in Japan and Diaoyu in China.
Australia and China have had a series of Defence exchanges in the past year.
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In October Defence welcomed a visit by General Zhao Keshi, a member of the Chinese Central Military Commission - the most senior Chinese military visitor to Australia in three years.
In 2013 Australia also hosted an inaugural Strategic Policy Exchange, in which both countries exchanged views on regional security and the formation of military capability requirements.
