SYDNEY - Australia and Indonesia agreed a treaty-level defense cooperation agreement which allow 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.

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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 neighbors 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.

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Prabowo said at a regional forum last November that Indonesia was committed to its policy of non-alignment.