The treaty was signed on the Indonesian island of Lombok
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Australia and Indonesia have signed a new security treaty aimed at creating a better relationship between the two countries.
The pact will strengthen ties in the areas of law enforcement, migration, defence and counter-terrorism.
Both countries have also pledged to respect each other's territorial integrity and not support separatism.
The last joint security pact was thrown out after Canberra sent troops to East Timor after the 1999 independence vote.
The pact was signed in Lombok by Indonesia's Foreign Minister Hassan Wirajuda and his Australian counterpart Alexander Downer.
Both countries described the document - which still needs approval from both parliaments - as a landmark agreement.
Negotiations over the treaty were severely tested earlier this year when Australia gave asylum to 42 people from Indonesia's troubled Papua province, who claimed they were fleeing persecution from the Indonesian military.
Jakarta saw the decision as evidence that Australia was sympathetic to Papuan separatist movements.
"With the signing of this framework on security cooperation agreement, I don't believe Australia would be a staging post for any separatists," Mr Wirajuda said.
Mr Downer insisted the pact would not infringe the rights of civil society groups or freedom of speech.