The agreement signed in Port Moresby yesterday will allow the AFP and Task Force Sweep to exchange information to help track down people who may be investing in Australia to dispose of corruptly-gained money.
The head of Taskforce Sweep, Sam Koim, says corruption will be the main focus and intelligence information the main tool.
"We will share information that is of mutual interest," he told Radio Australia's Phil Kafcaloudes.
"We will also seek assistance in terms of training (and) to look at cases that have links to Australia."
AFP Assistant Commissioner Ramsey Jabbour says the agreement is in the interest of both countries.
"They are our closest neighbours and I think it's always in our mutual interest to work cooperatively with all forms of transnational crime," he said.
"We're also very keen to ensure that Australia does not become a haven for money-laundering and it's certainly in our interest to ensure that does not occur."
For example, Mr Jabbour says, the AFP will work closely with Taskforce Sweep to target people who've bought properties in northern Australia using money that can't be accounted for.
"There are certainly allegations surrounding money movements and asset purchases but, from a policing perspective, we need to collect evidence that will be provided to courts to make their determination on these cases," he said.
He said the agreement would not be focussed solely on PNG nationals but also on Australians in PNG.
Meanwhile, PNG’s attorney general, Lawrence Kalinoe, has told Radio New Zealand International that the re-introduction of the death penalty is the only way to eradicate sorcery-related brutality.
He said violence must be met with violence.
“We’re still a tribal nation in transition,” Mr Kalinoe said. “Violence has been our mainstay of survival. If you don’t react to a violent situation in a similar fashion, that is seen as a weakness invitation.”