Th move came as the year 2015 marks the 60th anniversary of Australia's diplomatic presence in Malaysia and the year 2017 will mark the 60th anniversary of Malaysia-Australia diplomatic relations.
In a joint statement issued here on Sunday, the two countries agreed to strengthen political engagement through annual meetings to be underpinned by senior official talks and a strategic dialogue and augmented by enhanced defence dialogue.
These meetings are aimed at allowing exchanges of view, ideas and initiatives to develop a shared understanding of the strategic issues in the Indo-Pacific region and beyond.
In defence and security, the two countries reaffirmed their commitment to the Five Power Defence Arrangements and the Malaysia-Australia Joint Defence programme which provide a sound basis for ongoing collaboration on defence matters.
The Five Power Defence Arrangements are a series of defence relations established by a series of bilateral agreements between Britain, Australia, New Zealand, Malaysia and Singapore.
They also reaffirmed their commitment to bilateral cooperation in combating irregular migration, human trafficking and people smuggling.
In the joint statement, the two countries noted the importance of the Malaysia-Australia Free Trade Agreement as a springboard to growth in economic and trade relations, directing their ministers responsible for the trade to convene the Joint Trade Committee meeting at least once every two years.
Australia is a dialogue partner of the Association of Southeast Asian Nations (Asean).
Australian Prime Minister Malcolm Turnbull was here to attend the 27th Asean summit and related summits.
The agreement was reached between the Australian prime minister and his Malaysian counterpart Najib Razak, whose country hosts Asean summit 2015.