Prime Minister Anthony Albanese hosted PNG leader James Marape in Canberra where the deal was signed.
The agreement says Australia and PNG will strengthen cooperation in a range of areas including defence, police, law and justice, cybersecurity, climate change, and violence against women and children.
The agreement also says the two countries should hold talks to consider how to respond “in the event of a security-related development that threatens the sovereignty, peace or stability of either Party, or the Pacific region”.
“In the event of an external armed attack on either Party, the Parties shall consult for the purpose of deciding what measures should be taken, jointly or separately, in relation to the attack,” the deal says.
The agreement does not prevent PNG from cooperating with other countries on security assistance, but there is a provision in the deal that says the two countries shall coordinate on “the involvement and contribution of third parties”.
Australia has been looking to bolster its security arrangements in the Pacific after China signed a policing pact with the Solomon Islands.
There are concerns in Canberra about China securing a foothold in the region.