Prime Minister Scott Morrison said 99 per cent of Australia's trade with Indonesia will have tariffs reduced or eliminated under a new free trade deal.
Mr Morrison told a business event in Jakarta on Saturday a final deal would be in place by the end of 2018, after the federal government agreed to conclude negotiations on the new pact on Friday.
Making his first set-piece speech on the international stage as Prime Minister, Mr Morrison lavished praise on Indonesia's President Joko Widodo, calling him a strong and successful leader of the world's largest Muslim majority nation.
"He's a really good bloke. Very kind, very compassionate but a very strong man," Mr Morrison said.
The pair held talks at the Presidential Palace at Bogor on Friday, their first meeting and just a week after former prime minister Malcolm Turnbull was removed from office.
Mr Morrison said he and Mr Joko had struck up a friendship to continue the strong relations developed with Mr Turnbull.
The two leaders agreed to upgrade diplomatic relations to a Strategic Partnership, locking in regular ministerial meetings and a country-to-country workflow agenda.
Under the free trade agreement, highly traded Australian goods including live cattle, beef, grains, dairy and steel will benefit, with an opening up of avenues for vocational training, mining, engineering and construction, health and aged care services.
All of Indonesia's exports will enter Australia without tariffs or tax.
Australian investors will have access to Indonesia's university sector, with up to 67 per cent foreign ownership permitted for the first time.
"This is not just a trade agreement," Mr Morrison said.
"It's a partnership that goes well beyond that.
"All of this is meaning that Australian companies and the people who work for those companies can get a better go in the international market.
"For Australians that means more growth in the economy. When there's more growth in the economy that means better services for Australians.
Combating protectionism "It also means that when you're getting rid of tariffs, you're basically taking taxes off things that are being bought in Australia and our key imports that come out of Indonesia, particularly petroleum and furniture, wood and even footwear, these are things that will no longer have tariffs on them.
"Between our two countries, there will also be a lot more exchange, particularly in the area of education and training. Australians are the best trainers in the world."
The two also leaders committed in a joint statement to dealing with rising protectionism, intolerance and threats of conflict.
"If left unattended, these may lead to the dismantling of the precious ecosystem and rules-based regional architecture that we have built over the past half-century," it said.