The leaders met while attending the Copenhagen climate change summit
The "generous financial settlement" for a devolved justice department will only be available if powers are devolved soon, Gordon Brown has warned.
The British and Irish prime ministers made a joint statement from Copenhagen where they have been attending the climate change summit.
Gordon Brown and Brian Cowen said that completing the devolution of justice was needed to sustain confidence in NI.
The first and deputy first ministers clashed after a meeting on Monday.
Peter Robinson and Martin McGuinness were addressing the press after a North/South ministerial meeting in Limavady when Mr McGuinness was asked if he would resign if he did not get a date for the devolution of justice before Christmas.
He said he had an agreement with Mr Robinson, but it did not contain pre-conditions on parading or going off on "a solo run" to Gordon Brown.
Mr Robinson shook his head and said he regretted the tone of the remarks.
In a statement released on Thursday Mr Brown and Mr Cowen said they believed "significant progress" has been made on the issues surrounding the devolution of policing and justice.
"It is clear that all the main Northern Ireland parties support the devolution of policing and justice," it continued.
"The prime minister agreed a generous financial settlement in September that will ensure that a devolved justice department will have the resources it needs to manage particular financial pressures around, for example, hearing loss claims without detriment to front line policing and justice services.
"The financial package will only be available if devolution is completed in the coming months.
"Maintaining this progress and the early completion of devolution are important to sustaining public confidence across the whole community and to further enhancing Northern Ireland's international reputation."
The leaders said they would remain in close contact with Northern Ireland's political parties and have asked the secretary of state for Northern Ireland and the Irish minister for foreign affairs to review progress in the new year.
Sinn Fein MLA John O'Dowd said he believed the statement meant the two governments shared his party's position.
"We have implemented all of the agreements on policing we have made. Both governments have over recent months confirmed to us that this is their view also," he said.
"Our priority in the short time ahead is to see all of the outstanding matters including the transfer of powers on policing and justice resolved. The two governments have made it clear that they now share this priority."