Australia and Indonesia unveiled a new defence agreement Tuesday, pledging closer cooperation in the contested Asia-Pacific region as a new leader prepares to take over in Jakarta.

The pact -- which includes provisions for joint drills and each military operating in the other country -- was unveiled as Indonesian defence minister and president-elect Prabowo Subianto visited Canberra.

Prabowo, who will take the reins of the world's third-largest democracy in October, said he wanted to forge closer ties with Canberra while following the "general policies" of his predecessor Joko Widodo.

He singled out the need for Australian help in areas such as agriculture, food security and international drug trafficking.

Australian Defence Minister Richard Marles said the defence agreement, expected to be formally signed in the coming days, was one of the most significant agreements ever negotiated between the two neighbours.

"This historic treaty... will be a vital plank for our two countries to support each other's security," said Australian Prime Minister Anthony Albanese.

Indonesia and Australia have been hashing out the defence agreement since February last year.