Australia and Papua New Guinea have signed a new economic co-operation treaty during prime minister Tony Abbott's first formal visit to Port Moresby.
PNG prime minister Peter O'Neill told reporters on Friday the agreement would be the cornerstone of business and trade relations between the two countries.
Mr Abbott said Australia and PNG were more than friends. He said they are family.
The agreement includes annual leader-level talks.
Papua New Guinea will host the APEC regional leaders summit in 2018, which Mr Abbott described as a coming of age for Australia's neighbour.
Mr Abbott said it will demonstrate that PNG is not only a very big player in the Pacific but is increasingly a player in the wider world.