Prime Minister Anthony Albanese has acknowledged the "hard truths" of Australia's past relationship with East Timor, while announcing progress on a long-stalled gas project during his first visit to the small island nation.
Mr Albanese addressed the Timorese parliament and was granted the country's highest civilian honour, the Grand Collar.
"In dark times, it is our friendship and our innate respect for each other, for democracy and for sovereignty that will prevail," he said during his speech on Wednesday.
While not naming them directly, Mr Albanese also addressed long-held complaints about Australia's past behaviour in the region.
"History holds hard truths for all of us," he said.
"We have a responsibility to acknowledge them - and to learn from them.
"In the past, some actions taken by Australian governments did not honour, and were not worthy, of the close friendship between our nations."
Mr Albanese was likely referencing Australia's decision to recognise the Indonesian occupation of East Timor in 1975, and the later bugging of the Timorese cabinet offices.
The then-Whitlam government supported Indonesia's decision to invade the Island territory, which had previously been a colony of Portugal.
In 2004, during negotiations over access to oil and gas in the Timor Sea, Australian spies bugged a room adjacent to the Timorese prime minister's office in the capital Dili, sparking a major diplomatic spat when the espionage came to light.
Mr Albanese said his government would take a different approach.
"It is the firm resolve of the Labor government I lead - and the Australian people I serve - that peace, mutual respect and shared prosperity continue to be the guiding principles of our shared future," he said.
Mr Albanese also announced a share of profits from the Timor Sea project would be poured into an infrastructure fund for the island nation.
The long-stalled Greater Sunrise project faces roadblocks because East Timor - also known as Timor-Leste - wants the rights to process the gas, while the companies running the development have long argued it would be cheaper to process it in Australia.
After talks between Mr Albanese and Prime Minister Xanana Gusmao on Wednesday, the two leaders said they shared an "ambition for Greater Sunrise to be developed as soon as possible".
"Australia acknowledges Timor-Leste's commitment to onshore processing," the leaders said in a joint declaration.
"Australia will support any commercially viable solution to develop Greater Sunrise."
Speaking after the pair's meeting, Mr Gusmao said he'd impressed on Mr Albanese the importance of gas being processed onshore in East Timor.
"This is essential for our national development," he told reporters in Dili.
Mr Albanese said there were commercial issues involved in the negotiations, but the federal government would have oversight over the project.
As part of the agreement struck between the two leaders, Australia has promised to pour 10 per cent of any revenue it receives from the project into an infrastructure fund for East Timor.
Mr Albanese also set a goal of 10,000 Timorese workers obtaining jobs in Australia by 2027/28, doubling the existing number.
The visit comes after East Timor became the newest member country of ASEAN, a key diplomatic bloc in Southeast Asia.
"Timor-Leste is a friend, and has a friend, in Australia," Mr Albanese said.
Gordon Peake, a researcher and author who lived in the country from 2007 to 2011, said the ongoing gas stalemate was a "thorn in the side" of the relationship between the two nations, and Timorese officials would be hoping for tangible progress from Mr Albanese's visit.
"The Timorese are going to be really hoping that the prime minister's visit is not just handshakes and smiles and honeyed words," he told AAP.
