Indonesia said it was confident Australia will no longer be used as a staging post for separatist groups following the signing of a historic security pact.

Australian Foreign Minister Alexander Downer and his Indonesian counterpart Hassan Wirajuda signed the wide-ranging seven-page treaty on the resort island of Lombok.

The so-called Lombok Agreement signals a thawing of relations between the two nations, after Indonesia's ambassador to Australia was recalled amid a row earlier this year when Australia granted protection to 43 Papuan asylum-seekers.

The treaty – covering 10 areas including cooperation on defence, law enforcement, counter terrorism, intelligence, energy and emergency aid – is the first formal security agreement since Indonesia tore up the previous treaty during the 1999 East Timor crisis.

Importantly, both countries pledge not to support "in any manner" any activities which threaten the "stability, sovereignty or territorial activity" of the other, including separatist groups operating in their own territories. Australia and Indonesia have both previously said they don't want to see Australia become a staging point for secessionist groups.

Dr Wirajuda said Indonesia had expressed its concerns to the Australian government that those recently granted temporary visas were using Australia as a staging post.

However, the Papuan situation has been "really quiet" since then, he said. "We have expressed this openly, as far as we have expressed our concerns to the Australian government that those who were granted temporary visa have tried to use their presence to champion their separatist aspirations," he said. "But we have also witnessed that they have been pretty quiet since then. "With the signing of this agreement it strengthens our belief that Australia will not be used by them."

He urged the media not to focus on the Papua incident and the agreement covering nuclear issues, saying the talks started long before the asylum-seekers arrived in Australia.

The agreement commits Australia and Indonesia to cooperate to help prevent the spread of weapons of mass destruction, and strengthen "bilateral nuclear cooperation for peaceful purposes".

"The situation has been really quiet and there has been no threat of an exodus or mass movement of west Papuans to neighbouring countries in the south."

Mr Downer said Australians needed to realise there had been a "massive transformation" in Indonesia in recent years, describing it as a pluralistic society with a free press and freedom of speech. Further, any upheaval in Indonesia from separatist groups would be a potential disaster for the region.

"If Indonesia was to be broken up or if there was to be a massive upheaval in the republic of Indonesia... not only would that be a disaster, including a disaster for the people of Indonesia, but that would be a disaster for the whole region including Australia," Mr Downer said.

He said the Australian government was "delighted" to sign the agreement. "What this does is provide a bedrock for the relationship for many years to come." He said the deal still needed to be ratified by the parliaments of both countries.

"I'm hopeful that they will be very positive in their response to it," Mr Downer said.