Singapore will fund more than $2 billion upgrading military assets in Australia in a deal that will boost economic and defence ties.

Former trade minister Andrew Robb has clinched the landmark deal, which aims to elevate ties with Singapore to the same level as Australia-New Zealand relations.

Singapore, with a land mass of 700 square kilometres, has long sent troops to Australia for military exercises. The new deal would allow the Asian nation to increase the number of troops it has on rotation in Australia from 6,000 to 14,000.

Under the 25-year agreement, Singapore would fund $2.25b expanding the Shoalwater Bay Training Area and the Townsville Field Training Area, both in the north of Queensland state.

The move to forge closer military ties between Australia and Singapore comes at a time of rising tensions between much of Asia and China, which has been building military and civilian facilities on its artificial islands in the disputed South China Sea.

– with other agencies