Australia and Singapore will jointly develop military training areas and facilities in Australia, the city-state's Foreign Ministry said, as part of a deal that expands defense cooperation between the two countries and improves economic ties.

It was reported earlier Singapore will fund a 2.25 billion Australian dollar ($1.7 billion) expansion of military training facilities in Australia, according to a government source.

Land-scarce Singapore has long sent troops to Australia for military exercises. The new deal will allow the Asian nation to increase the number of troops it has on rotation in Australia to 14,000, from 6,000.