Defence Minister Richard Marles and his German counterpart Boris Pistorius announced on Thursday they would pursue a status of forces agreement.
Mr Marles said the legal framework for the stationing of military personnel would make it easier to operate from each other's countries.
"That is hugely important in terms of plotting our pathway forward together," he told reporters in a joint press conference.
Mr Pistorius echoed the sentiment of visiting European Commission President Ursula von der Leyen, who warned about a "brutal and unforgiving" world.
"What we all are learning now is to diversify our relations, to reduce our dependencies, and to broaden the view ... on the world and what is going on," he said.
"(What) we should do is to focus on ourselves as those allies and partners who really rely on rules-based international order, who are not superpowers.
"If we don't stay committed, if we don't stick together, nobody else will do so."
The pair also agreed to co-operate on space.
Australia and the European Union earlier this week signed a long-awaited free trade deal following several years of tough negotiations.
The US-lsrael war on Iran has called into question Washington's reliability as a security partner under the Trump administration.
Asked if Australia still supported the war, Mr Marles said the government backed efforts to prevent Iran from acquiring a nuclear capability.
He pointed to the large Australian expat population in the United Arab Emirates and the nation's partnership with the region which hosts Australian troops.
"Australia's national interest lies in the defence of the Gulf states, and that's the interest that we are pursuing," Mr Marles said.
Mr Pistorius said Germany didn't want to get sucked into a war that was not its own and Berlin had not been consulted on.
"To make it crystal clear, what we need now is this diplomatic solution as soon as possible," he said.
"We need the end of shooting and killing."
The German defence minister is also delivering an address to the National Press Club on Thursday.