Attorney-General George Brandis has warned the sustained fighting in the southern Philippines city of Marawi poses an immediate and urgent threat to Indonesia and the region more generally, including Australia.
Senator Brandis made the comments in Manado, North Sulawesi, where he co-hosted a meeting on foreign terrorist fighters returning to the region.
"The collapse of the ISIL [Islamic State group] caliphate as we achieve victory in that civil war in the Middle East throws up a new range of problems," the Attorney-General said.
"In particular, the problem of foreign fighters seeking to rebase themselves elsewhere in the world, including in this region."
In the final communique, ministers from six countries expressed "grave concern" at the growing threat of radicalism and violent extremism and also noted "rapidly evolving" threats facing the region.
Indonesia and Australia co-chaired the inaugural summit that was also attended by ministers from the Philippines, Malaysia, Brunei and New Zealand.
They agreed to enhance law enforcement cooperation and intelligence sharing.
"Ministers discussed the rapidly evolving threats facing the region, and agreed that it is vital to respond collectively in a manner that is coordinated, strategic and pursued at all levels of government together with private actors and civil society," the final communique stated.
Senator Brandis expressed condolences to the Philippines with the fighting in Marawi claiming more than 400 lives, including more than 70 troops and 40 civilians.
"The conflict in Marawi reminds us in the most immediate possible way of the urgency and the proximity of the threat that is faced by all of us," Senator Brandis said.
During the summit the nations agreed to a law enforcement dialogue, led by the Australian Federal Police and Indonesian police, to discuss the threat of the Islamic State group and to establish what would be known as a Foreign Terrorist Fighters Strategic Forum, to enhance information sharing among police and intelligence agencies.
That forum would also build on and establish databases to help track terrorists.
They also agreed to a roundtable on the management of terrorist prisoners and to study each nation's counter-terrorism laws.
"I think Australians understand that we are threatened just as our regional partners are threatened and I think we all understand that this threat is best thwarted if we work collaboratively together."
The final communique also commits to greater collaboration between the six nations border control agencies and strengthening cooperation between financial intelligence units.
Indonesia's Security Minister Wiranto described terrorism as a threat to humanity.
"Not one country in the world is free from the threat of terrorism, and we must face the threat together," he said.
