Australia and Nauru have signed a landmark new treaty which will see the federal government provide $140 million in budget and security support to the Pacific Island country in return for gaining effective veto powers over many of its national security decisions.
The government says Commonwealth Bank has also agreed to set up branch in Nauru to ensure the nation isn't left without a bank when Bendigo exits next year.
In return, the government of Nauru has agreed with Australia that the country's critical infrastructure "shall not be used by any third party for security purposes".
Australia will also be able to veto any engagements by third countries in Nauru's "security and key critical infrastructure sectors".
The agreement is similar in some ways to the Falepili Union which Australia signed last year with the Pacific Island nation of Tuvalu.
The pacts are part of a broader push by Australia to cement its strategic position in the Pacific in the face of increasingly fierce competition with China.
