A security agreement struck by Australia and Indonesia is a significant elevation of the two neighbours' relationship but will not bind either to fight in each other's defence.

Prime Minister Anthony Albanese and Indonesian President Prabowo Subianto on Wednesday announced the end of negotiations, with the agreement scheduled to be formally signed in January.

Mr Albanese said the deal committed the nations to consult regularly on matters of security, and consider possible measures should either's security be threatened.

While Foreign Minister Penny Wong was scant on detail when questioned about the scenarios that could trigger Australia into action under the deal, one expert says the agreement does not make the nations allies in defence.

"It's not a mutual defence treaty similar to wha

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