Australia is on the cusp of finalising a multi-million dollar agreement with Vanuatu as part of bolstering security in the Pacific region.
A $500 million deal between the two countries was given the green light to be formally signed off following talks in Vanuatu on Wednesday.
The deal, known as the Nakamal Agreement, would help address infrastructure and economic development in the Pacific as well as resilience to climate change.
Foreign Minister Penny Wong and Defence Minister Richard Marles held negotiations with Vanuatu leaders, giving the go-ahead to the agreement in a signing ceremony on the edge of an active volcano.
It is expected Prime Minister Anthony Albanese and his Vanuatuan counterpart Jotham Napat will formally ratify the agreement in September.
Mr Marles said there had been a significant breakthrough in negotiations on the agreement.
"It is core business for Australia to be engaged in the human development of Vanuatu," he told reporters on Wednesday.
"It acknowledges that as neighbours we have a shared security environment and a commitment to each other, which is embodied in this agreement."
Talks on the agreement, which is expected to see about $50 million each year sent to Vanuatu, have been under way for several months.
Mr Napat said the agreement would be a "win-win" scenario for both countries.
"The agreement, at the end of the day, will transpire into a lot of great benefits between the two countries, where it be the security agreement, economic transformation, or with the specific focusing on the labour mobility and financial support," he said.
Senator Wong said the partnership would be transformative.
"The important thing about this agreement is not only the now ... but actually the most important thing is where we will be in three, and five and 10 years," she said.,
"This is the day in which, on which the Australia-Vanuatu relationship was transformed, and our people have benefited as a result."
The agreement comes ahead of Senator Wong flying to Fiji as part of a meeting with other foreign ministers at the Pacific Islands Forum.
Security issues in the region, as well as the influence of China in neighbouring countries, are expected to dominate discussions.
