Australia and Britain are to share information, technology, policy and personnel in a bid to minimise costs under a new defence treaty to be signed in Perth on Friday.
Defence Minister Stephen Smith is to sign the treaty with his counterpart Philip Hammond.
The UK Ministry of Defence said in a statement that the agreement will produce a closer bond on matters of cyber security, defence reform, personnel exchange, equipment, and science and technology.
"In times of budget pressures for all nations, it makes sense to maximise economies of scale and work with our friends to get the best value for money on all sides," Mr Hammond said.
"Australia is a close ally of the UK and NATO in Afghanistan, as in Iraq, and is a key partner in the Asia Pacific region.''
AAP reports the treaty is expected to see Australia use a nwew ship of British-design when it comes time to consider a future frigate programme.
Mr Hammond and Mr Smith will be joined by British Foreign Secretary William Hague in Perth for ministerial talks on Friday.
Frigates are expected to be on the discussion agenda along with the transition in Afghanistan, cyber security and international threats such as Syria, Iran, and North Korea.