The deal includes a "status of forces agreement", according to ministers from both countries, making it easier for each country's soldiers to deploy and operate in the other.

UK Defence Minister Grant Shapps signed the agreement with his Australian counterpart Richard Marles during a ceremony in parliament in Canberra.

"As the world becomes more complex and uncertain, we must modernise our most important partnerships," Marles told reporters after the signing.

"The agreements we reached today will secure this outcome into the future."

The agreement stops short of a full mutual defence pact, which would bind one side to intervene if the other was attacked or under threat.

Instead, both sides said they had a "commitment to consult" with each other if threats arose.

A status of forces agreement, common between NATO allies, outlines the rules for foreign military personnel based in a host country.

Australia already has a longstanding status of forces agreement with the United States.

Alongside the United States, Australia and the UK are members of the fledgling AUKUS defence alliance -- a landmark pact aimed at curbing Chinese military expansion in the Asia-Pacific.

A major pillar of the AUKUS pact is a promise to help Australia build and acquire a fleet of potent nuclear-powered submarines, one of its biggest-ever military upgrades.

Thursday's agreement would make it easier, for example, for Australian sailors to train on the UK's nuclear subs, or for British crews to be based in Australia.

Governments in London and Washington have been racing to lay the foundations for the AUKUS deal as they face the prospect of potential political changes.