Anthony Albanese has committed to attending the upcoming G20 summit in Indonesia, despite Russian President Vladimir Putin also going.
The prime minister, who is visiting Jakarta as part of his first overseas bilateral visit as leader, said he would go to Bali in November for the G20 leaders' summit.
The upcoming summit has attracted controversy due to the appearance of Mr Putin amid Russia's invasion of Ukraine.
However, Mr Albanese said attending the G20 was a priority for the government.
"I'm focused on sitting with President Widodo, not sitting with President Putin," he told reporters in Jakarta.
"The work of the G20 is critical at this time of global economic uncertainty, and it will be working with Indonesia that we most effectively tackle the many challenges we face."
The prime minister held talks on Monday with Indonesian President Joko Widodo at the Bogor Palace in Jakarta, with the two also planting a tree together and cycling around the palace grounds.
The leaders discussed trade, climate and a strategic partnership between the two countries, with Mr Albanese also pledging to rebuild Indonesian language education in Australia.
He said working more closely with Indonesia was essential amid growing uncertainty in the region, and stressed the importance of a comprehensive economic partnership agreement between the two countries.
The prime minister said it was critical both countries work together to realise the potential of the agreement.
"What I would see as a success is that investment growing, that relationship growing," he said.
"We spoke with ministers today, as well as with President Widodo, about the potential that there is across a range of areas."
Economic ministers from the two countries are set to meet regularly to carry out work on the comprehensive economic partnership agreement.
The prime minister also affirmed Australia's commitment to the AUKUS security pact with Mr Widodo, despite Indonesia initially raising some concerns about the alliance.
The Indonesia president said he was pleased his country was the first Mr Albanese visited for bilateral talks since he became prime minister.
"It shows the good relations between the two nations. Mr Albanese is not a new person to me, we met in 2020," he said.
The two leaders also discussed education and health, food security, as well as the situation in Ukraine and partnerships on developments in the Indo-Pacific.
"Strategic competition in the region must be well managed to avoid open conflict," Mr Widodo said.
"The culture of peace and strategic trust needs to be strengthened continuously."
The prime minister also emphasised strengthening relationships with Indonesia as well as the broader southeast Asian region.
"ASEAN and ASEAN-led institutions are at the absolute centre of our vision for the Indo-Pacific," Mr Albanese said.
"This also means supporting Indonesia's leadership in the region."
Following the meeting with the president, the prime minister held talks with ASEAN Secretary-General Dato Lim Jock Hoi.
He then took part in a wreath-laying ceremony at a memorial.
