The partnership will look to advance PNG's social and economic development, and deliver vital infrastructure including roads to ensure services reach more people and improve access to markets.
Women's economic empowerment will be a key focus of the partnership which also aims to address PNG's chronic family and sexual violence issues, enabling more women to break the poverty cycle.
These were central to discussion at last week's 24th Australia-Papua New Guinea Ministerial Forum in Canberra.
The newspaper, The National, reported that Ms Bishop also outlined shared priorities in the health, education, transport and the justice sector.
Two-way trade between the countries is worth US$5 billion and Australian investment in PNG totals US$14 billion.