Defence Minister Richard Marles will host his PNG counterpart Billy Joseph in Brisbane on Thursday for defence ministerial talks.
They are expected to confirm the nations are entering into discussions for a bilateral agreement that will create a framework for the two militaries to step up their cooperation across security areas.
The PNG government last year reaffirmed Australia should be its security partner of choice, and that it wasn't considering a policing deal with China.
Beijing approached Port Moresby with a policing deal following the outbreak of deadly tribal violence which the nation struggled to get under control.
A policing deal signed between Beijing and the Solomon Islands alarmed Australia and the US, with concerns it opened the door to a potential Chinese naval base in the region.
In September, PNG will mark 50 years of independence from Australia, with Canberra to support the celebrations.
More than 1000 defence force personnel from both countries travelled for joint training and exercises last year under the Australia-PNG defence partnership.
PNG military officers also hold senior roles within the Australian Defence Force.
Mr Marles thanked Dr Joseph for his ambition in expanding the defence relationship, which would be taken to the "next level".
"The shared ambition for a treaty level agreement would expand and modernise Australia and Papua New Guinea's defence relationship and facilitate deeper integration," he said.
"Practically, a treaty would make it easier for Australia and PNG to support each other's security, and contribute to the collective security of the region."
