Laws to crack down on defence personnel spilling secrets and beefed-up export controls to streamline co-operation with the US and UK and restrict sensitive information going to third countries have passed parliament.
Defence Minister Richard Marles said the new laws strengthened Australia's national security.
"The importance of protecting our nation's secrets and sensitive information cannot be overstated, it is central to preserving Australia's national security and to keeping Australians safe," he said.
The laws were supported by the coalition, with opposition foreign affairs spokesman Simon Birmingham saying it was important Australia maintained Washington's trust as it moved to acquire US nuclear submarine technology.
It was important Canberra showed Washington it could manage sensitive nuclear secrets because it was "a big test of trust," he said, adding Australia was only the second nation brought into the tent on the classified technologies.
But the Greens were critical of the plan to acquire nuclear submarines, saying Australia was spending hundreds of billions of dollars for vessels that wouldn't arrive for decades instead of focusing on domestic issues.
Tightening controls around the sharing of information with countries not on the approved list would also lead to a brain drain in Australia, Greens senator David Shoebridge said.
But Mr Marles argued it would streamline defence co-operation with the US and UK, who will not need export permits.
Australia will buy at least three Virginia-class nuclear powered submarines from the US from early next decade under the trilateral AUKUS agreement that also includes Britain.
The three nations are co-operating on a new class of submarines - the SSN AUKUS - that Australia is set to acquire in the 2040s.
The new laws tighten regulations around current and former soldiers and defence personnel working with third parties to better protect classified information after reports Western pilots were approached to train China's military.
They will need to obtain approval to work for a foreign military or government entity and a failure to do so carries a penalty of 20 years in prison.
People granted permission but then stray from their requirements could face five years behind bars.
Those who do provide training about military techniques or weapons will also face 20 years in jail.
