SYDNEY Australia and Indonesia agreed a treaty-level defence cooperation agreement which allows Australian and Indonesian militaries to operate from each other's countries, Australian Prime Minister Anthony Albanese said on Tuesday.

"It will be a vital plank for our two countries to support each other's security, which is vital to both countries, but also to the stability of the region that we share," Albanese told a joint press conference in Canberra with Indonesia President-elect Prabowo Subianto.

Australia and Indonesia share the world's longest maritime boundary and already collaborate on a number of issues, including security, people-trafficking and drug smuggling.

"The map really determines that Australia and Indonesia as the closest of neighbours have a shared destiny, but from this moment forth, that destiny is very much defined by deep strategic trust," Australian Defence Minister Richard Marles said.

Australia has struck a number of defence deals in recent years, most notably the AUKUS military alliance with the US and Great Britain that angered China.

Prabowo said at a forum last November that Indonesia was committed to its policy of non-alignment and would keep good ties with both China and the US.

  - Reuters