A delegation of Australian ministers ironed out the deal during negotiations on the slopes of Vanuatu's Mount Yasur, a steam-belching active volcano.

Australia was close to clinching a security deal with Vanuatu in 2023, but it was scuppered when the island's lawmakers unexpectedly swapped in a new prime minister seen as less friendly to the West.

Australian Defence Minister Richard Marles said the two sides had now finalised a new agreement, which would be signed in coming weeks.

"It acknowledges that, as neighbours, we have a shared security environment and a committment to each other, which is embodied in this agreement," he said.

Vanuatu Prime Minister Jotham Napat -- elected in February this year -- said the agreement would also cover "economic development and climate resilience".

Across the South Pacific, climate-vulnerable countries are trying to balance relations between the West and China -- seeking to score much-needed funding from both while retaining their hard-won independence.

Many nations in the region are in desperate need of investment, as fragile economies falter and the costs related to climate change grow.

China has in recent years furnished Vanuatu with freshly paved roads, government office buildings, and even a new palace for the country's president.