The two countries have sought to boost security ties in the face of increased flashpoints in the region including the South China Sea, where several states claim sovereignty over disputed islands and waterways.

The four-day exercise named Keris Woomera on Indonesia's main island Java includes air, land, sea and cyber exercises in what Australian Defence Minister Richard Marles has called "the biggest exercise that Australia will do outside of our nation this year".

Both forces carried out an amphibious landing at a beach in eastern Java on Wednesday, the Australian embassy in Jakarta said in a statement.

Tanks, ships, fighter jets, landing craft, assault helicopters, and around 2,000 military personnel were also involved in a live-fire exercise, it said.

Indonesian President Prabowo Subianto called the new security agreement signed in August a "historic milestone" for ties between the two nations.

It includes provisions for joint drills and deployments to each country.

Prabowo has pledged to be bolder on the world stage and in August visited Canberra for talks with Australian Prime Minister Anthony Albanese.

Jakarta also held navy drills with Russia earlier this month off the coast of eastern Java, while Prabowo visited Beijing and Washington in recent days as he seeks to balance relations with all major powers.

Australia hopes to cement closer ties with Indonesia as the region is riven by rivalry between China and the United States.

Separated by less than 300 kilometres (186 miles) at their closest point, Indonesia and Australia have charted different courses while navigating those geopolitical upheavals.

Canberra has drawn ever nearer to longtime ally the United States, bolstering its military in an attempt to deter the might of a rising China.

Jakarta has meanwhile walked a more neutral path, wary of drawing too close to Washington and far less willing to needle Beijing.