Defence Minister Richard Marles and Foreign Minister Penny Wong met their counterparts, Winston Peters and Judith Collins respectively, in Canberra on Tuesday as part of annual talks.
The Australian Defence Force and New Zealand Defence Force will boost co-operation, with members of each being increasingly embedded in the other over the next decade as part of an "ANZAC 2035 vision".
This will include increasing support for security operations in the Pacific, including tackling transnational organised crime, drug trafficking and natural disasters.
An Australia-NZ working group will identify where both forces can better integrate and train together, and there will be combined investment in defence industry production and procurement, the ministers announced.
"This is important not just because of the world today, but because both of our defence forces are growing," Mr Marles told reporters at a joint press conference following the ministerial meeting.
Growing the militaries in tandem allows both nations to better leverage their capabilities, Mr Marles said.
"It's not lost on any of us that in the context of that world, it is profoundly important that in the community of nations, family as we are, stick closely together," he said.
The joint statement described it as being "force multipliers for each other" with defence forces able to combine to tackle security threats.
Both nations would work closely with Pacific island nations to lift capability and streamline co-operation across the region, Ms Collins added.
"We are both Pacific, and our security is inextricably linked to the security of the Pacific region and its peoples," she said.
The trans-Tasman partnership has never been more important, Senator Wong said.
"This is amplified middle power diplomacy in action," she said.
Senator Wong said discussions with her counterpart also included oil supply coming out of the Gulf as Iran halts tankers traversing the Strait of Hormuz, through which 20 per cent of the world's oil transits.
Australia was engaging with countries it imported fuel from amid concerns about supply, including China, she added, as Beijing moves to restrict exports to shore up domestic supply.
