Germany and Australia will work more closely on issues from tax to technology after talks between Malcolm Turnbull and Angela Merkel in Berlin.
Mr Turnbull received an official welcome at the Chancellery ahead of meeting with the German leader.
They received the findings of an advisory group which included 59 recommendations to improve relations between the two nations.
The group, involving Finance Minister Mathias Cormann and the prime minister's wife Lucy Turnbull, says work on improving the Australian-German relationship had been "long overdue".
Germany and Australia on Thursday signed a treaty to deal with "double taxation", which came out of the study, and Australia will appoint a trade commissioner in Frankfurt.
From 2016, the two countries' foreign and defence ministers will hold an annual dialogue.
And more effort will be put into linking scientists and businesses to commercialise new research.
As well, Germany's football team has been invited to take on the Socceroos and other Asian teams in 2018/19.
Germany is one of three countries - with Japan and France - to bid for Australia's next generation of submarines.
The Turnbull government is committed to maximising Australian shipbuilding jobs out of the contract.
Dr Merkel, who marks 10 years in office on November 22, has been at the heart of European talks on the refugee crisis and has taken some political heat for her humanitarian approach.
A small group of indigenous protesters gathered outside the Chancellery, seeking better land rights.
Mr Turnbull next heads to Turkey for the G20 summit and will meet with US President Barack Obama on the sidelines of the APEC summit in Manila on Tuesday.
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