Australia's relationship with close neighbor Singapore will be strengthened by an announcement to boost the Asian nation's military training presence in northern Australia.

The 25-year deal, worth up to 1.7 billion dollars to the Australian economy, will result in up to 14,000 Singaporean troops being stationed in Australia for 18 weeks at a time, with new defence barracks to be built in Queensland by Singapore's government.

Trade Minister Steven Ciobo told the Australian Broadcasting Corporation (ABC) on Friday the deal would benefit both nations, as Singapore will get adequate space to conduct military training, while the investment in Australian-built infrastructure will aid the local economy.

"I don't think it's a surprise to anybody that a small city-state like Singapore looks throughout the region to where they're able to mobilize forces, to where they're able to build experienced capacity and training," Ciobo said.

"Australia has had a long-term great relationship with Singapore, so it's a logical extension."

"There'll (also) be opportunities obviously in the local community to be big beneficiaries, not only from people staying there and sometimes they'll bring family with them, but also from the money that's going to be spent to improve the bases themselves."

Singapore's tiny land mass, of just over 700 square kilometers, does not allow its military adequate space for training exercises, but the Australian government offered the deal for Singapore to use the boundless plains in Australia's north.

Singapore's armed forces currently allocate 6,000 troops to Australia -- for a short amount of time -- but the new deal will allow more than double the number of soldiers to stay much longer.

Former Trade Minister Andrew Robb, who masterminded the deal while in cabinet, said the agreement will take the relationship shared by Singapore and Australia "to a whole other level."

Once the barracks and facilities are built, Singapore will be the only nation aside from the United States to have invested in military infrastructure in Australia.

The Australian Army will also be able to use the facilities when the Singaporean forces are not housed in the barracks.

The facilities are to be built and developed at Shoalwater Bay and Townsville in Queensland.