Papua New Guinea's hopes of fielding a team in Australia's NRL competition could hinge on a promise from its government not to sign a security deal with China.

Australia and PNG are closing in on agreement that would see Canberra provide up to $600 million in support for the NRL bid.

The ABC can reveal the negotiations include an assurance PNG will not sign a security deal that could allow Chinese police or military forces to be based in the Pacific nation.

When asked about the security element, PNG Prime Minister James Marape said it was not the "main feature" of the agreement.

"For PNG and Australia, we have deeper sentimental values. Both nations love rugby league, both nations have a strong affinity. And all in all, we're working towards far bigger issues than just the security aspect to it."

Pat Conroy, Australia's Minister for International Development and the Pacific, said the finer details of the agreement were still being negotiated, but he would not clarify what they were.

In a sit-down interview with the ABC, he said the deal was about bringing Australia and PNG closer together.

"Rugby league is one element of our soft diplomacy," he said.

"It's one element of the Albanese Labor government using every tool of statecraft to bring the people of the Pacific and Australia together and ensure that Australia is the partner of choice."

The minister said he didn't believe there was a place for Chinese police in the Pacific.

"Countries outside the region are always seeking to form security partnerships with Pacific nations. But Australia, as a proud member of the Pacific family, is committed to being the partner of choice."

Mr Conroy was in Port Moresby on Sunday to attend the Prime Minister's XIII rugby league games between Australia and PNG.

He and Mr Marape met with NRL chief executive Andrew Abdo and officials involved in the PNG NRL bid.

If successful, it's expected PNG will join the competition in 2028 with a team based out of Port Moresby.

Up to $600 million in Australian federal funding over 10 years would go towards setting up the franchise, player development, education and community outreach programs.

Dr Gordon Peake, a senior advisor on the Pacific islands at the United States Institute of Peace, said the security negotiations around the deal went far beyond "soft power" diplomacy.

"I think it shows that the real game that is going on here is very much about hard power, and it's all about Australia trying to thwart or stop Chinese influence in Papua New Guinea," he said.

The negotiations have come after Solomon Islands signed a wide-ranging security pact with China in 2022, which opened the way for Beijing to send police and military forces there.

The ABC understands China has sought similar deals with other Pacific nations, including Papua New Guinea.

"That [Solomon Islands deal] was really the equivalent of China running up the score against Australia," Dr Peake said.

"Australia doesn't really want to have another incident where it has diplomatic egg on its face, and it has China jostling for additional primacy in Papua New Guinea."

Dr Peake said China gaining a military foothold in PNG would present security risks to Australia given the two countries' proximity.

It remains unclear exactly how the deal would be framed and enforced.

"What would happen if, in the future, a Papua New Guinea minister went up to Beijing and signed something or agreed to expand relationships with China? I mean, would the NRL team be suspended?" Dr Peake said.

"Would they? Would they roll up and go home?

Mr Conroy said the parties were broadly aligned on the "fundamentals" of an agreement, and he was optimistic it would be finalised soon.

It's unclear exactly when a deal will be announced, with negotiations ongoing.