Under the treaty, Nauru must seek Australia’s agreement before it inks any other bilateral deals concerning maritime security, defence and policing.

The Pacific microstate must also consult with Australia if other countries look to strike agreements relating to its ports, airfields, or banking sector.

“This treaty will make our region stronger and it will make our region safer,” Australian prime minister Anthony Albanese said.

“It’s a good day for the security and resilience of the Pacific region.”

In turn Nauru will receive US$64 million in direct budget support, and a further US$25 million to bolster its stretched police force.

China has been determinedly seeking out new friends in the South Pacific, and last year persuaded Nauru to sever diplomatic links with Taiwan.

Nauru president David Adeang said the treaty was “vital” in strengthening the economy and enhancing “our mutual security and addresses critical challenges”.

Under the treaty, Australia will also commit to keeping banking services running on Nauru.

For years, western banks have been shuttering branches throughout the South Pacific, citing political turmoil, wafer-thin profits and the high cost of doing business.

State-owned Bank of China has indicated it is eager to step in, stoking worries that Beijing could expand its already considerable diplomatic and commercial clout.

Nauru, population 12,500, is one of the world’s smallest countries with a mainland measuring just 20sq km.

The country is considered especially vulnerable to rising sea levels, and has high rates of unemployment and health issues, a recent World Bank assessment said.

Phosphate mining once made Nauru one of the world’s richest countries per capita.

But that boon has long dried up, leaving much of the mainland a barren moonscape unsuitable for both agriculture and housing.