The United States will join Australia in expanding a deep-water naval base on Manus Island into a key staging point into Asia.
The Lombrum naval base will be expanded to host Australian and US naval ships as part of a deal signed with Papua New Guinea.
The base gives the United States another deep-water port close to the contested South China Sea.
Australia has been working on the facility with PNG for some time but US Vice President Mike Pence announced his country's involvement in a speech at an Asia Pacific Economic Cooperation meeting in Port Moresby on Saturday.
"Today it is my privilege to announce that the US will partner with PNG and Australia on their joint initiative on Manus Island," Mr Pence said.
The details of how much money Australia is paying for the base and how many ships will be stationed there are still under wraps.
"All the details we'll be working though in the time ahead and the investments that we're making," Prime Minister Scott Morrison told reporters in PNG.
"But the key thing here is the PNG government has invited us to participate at Manus Island in the Lombrum initiative and they've invited the United States to do the same thing, and so we're pleased to be working together."
Defence officials recently said they had been looking at ways to expand the deep water port facility.
The base is seen as a potential counter to China's rising influence in the contested South China Sea, where China has militarised previously unclaimed islands.
Australian Associated Press
