Prime Minister Anthony Albanese and his PNG counterpart James Marape met in Brisbane as the Pukpuk treaty kicked in on Wednesday.
"Leaders acknowledged this marked a new era in the bilateral relationship, underpinned by a high degree of strategic trust, mutual respect, commitment to sovereignty and equal partnership," a joint statement read.
The treaty allows the recruitment of PNG citizens into the Australian Defence Force.
The meeting acknowledged the "urgency of addressing and responding to climate change" in addition to the importance of labour mobility as an economic driver for PNG.
Mr Albanese has also held meetings with Tonga's Lord Fatafehi Fakafanua and Samoa's La'auli Leuatea Schmidt.
The prime minister will also host the three Pacific leaders at the State of Origin decider at Suncorp Stadium on Wednesday evening.
Mr Schmidt told his Australian counterpart the two nations were no longer friends but now family.
"We consider Australia as one of the strongest partners to protect us all in the Pacific region and Samoa," he said.
Lord Fakafanua said Tonga backed the Pacific leaders' proposal for an ocean of peace after China's launch of an intercontinental ballistic missile into the region on Monday.
The meetings were followed by a Pacific rugby league event in the Sunshine State's capital with all four leaders.
The government will commit $250 million over 10 years to the Pacific Rugby League Partnership as part of its $600 million investment in rugby league across the region.
This includes support for the entry of the Papua New Guinea Chiefs into the National Rugby League in 2028.
Mr Albanese said the move would bring the countries closer together.
"A partnership between nations, leagues, clubs and schools but above all between peoples," he said.
"A partnership built on the Pacific's deep, shared passion for rugby league.
"Today, our Pacific family draws closer together. We bond around a shared love of this great game, a shared investment in our young people and their future and a shared commitment to the region we call home."
The coalition supported deepening engagement with Australia's Pacific Island neighbours through soft diplomacy, opposition foreign affairs spokesman Ted O'Brien said.
"It is a positive move for us to be engaging with them when it comes to sport," he said.
Mr Albanese returned from a successful trip to Fiji and the Solomon Islands, during which he signed a historic mutual-defence pact with Suva.
The Ocean of Peace Alliance, which could be expanded to include other Pacific nations, makes Fiji Australia's fourth official ally.
Since 2023, Australia has signed treaties with Tuvalu and Nauru and an alliance with Papua New Guinea, as well as the Nakamal Agreement with Vanuatu.
Solomon Islands Prime Minister Matthew Wale and Mr Albanese progressed talks on a new treaty in Honiara on Tuesday.
Henry Ivarature of the Australian Pacific Security College said Australia had done "exceptionally well" to cement itself as the regional hub for Pacific countries.
He expected continued talks to expand Australia's presence in neighbouring islands, signalling a new era of strength for the region.
"Australia has learnt to listen and it has learnt to accept the way Pacific governments work. It has been patient," he said.
But Dr Ivarature said attention would now turn to sustaining trust across a long period, something that shared interests such as rugby league were likely to help facilitate.
"These kinds of agreements have to be maintained. When I travel to little islands like Tuvalu and I see Australian posts there, that is a really positive sign," he said.
