Australia's ties with Vanuatu will go to "the next level", despite the two countries failing to sign off on a long-awaited security and economic agreement, the prime minister says.

Anthony Albanese held talks with his Vanuatu counterpart Jotham Napat in Port Vila on Tuesday, before a visit to the Solomon Islands for the Pacific Islands Forum.

There was expectation the Vanuatu visit would feature both leaders signing off on the $500 million Nakamal security pact, following months of negotiations.

But Mr Napat indicated more time was needed by the Vanuatu government to consider the agreement, with concern it could restrict the Pacific nation's ability to get funding from other countries for critical infrastructure.

The Nakamal agreement is believed to carry a significant security element

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