Australia will participate in the Malabar naval exercise next month involving India, the US and Japan that will bring the four key defence partners and democracies in the region together, demonstrating their collective resolve to support an open and prosperous Indo-Pacific.

In a significant move that comes amid a Sino-India border row, India on Monday announced Australia's participation in the upcoming Malabar exercise along with the US and Japan, effectively making it the first military-level engagement between the four-member nation grouping -- the Quad.

The invitation by India to the Australian navy for the exercise came two weeks after the foreign ministers of the Quad held extensive talks in Tokyo with a focus on enhancing their cooperation in the Indo-Pacific, a region that has been witnessing increasing Chinese military assertiveness.

In a joint statement with Australian Defence Minister Linda Reynolds, Foreign Minister Marise Payne said the announcement was another important step in Australia's deepening relationship with India.

The government said that following an invitation from India, Australia will participate in the Malabar-2020 exercise, which is likely to take place next month in the Bay of Bengal and the Arabian Sea.

The exercise will bring together four key regional defence partners India, Japan, the United States and Australia in November, it said.

Reynolds said Malabar-2020 marked a milestone opportunity for the Australian Defence Force (ADF).

"High-end military exercises like MALABAR are key to enhancing Australia's maritime capabilities, building interoperability with our close partners, and demonstrating our collective resolve to support an open and prosperous Indo-Pacific," Reynolds said.

For the last few years, Australia has been showing keen interest in participating in the high-end naval exercise. Australia will be returning to the joint manoeuvres after its participation in 2007. The US has been pushing for a deeper military collaboration with Japan, India and Australia against China's growing regional influence.

Beijing claims almost all of the 1.3 million square-mile South China Sea as its sovereign territory. China has been building military bases on artificial islands in the region which, in parts, is claimed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

Beijing has impeded commercial activity like fishing and mineral exploration by neighbouring nations in recent years, saying the ownership of the resource-rich maritime territory belongs to China for hundreds of years.

Foreign Minister Payne said that the Malabar exercise also "showcases the deep trust between four major Indo-Pacific democracies and their shared will to work together on common security interests".

"This builds on the Comprehensive Strategic Partnership, to which Prime Minister (Scott) Morrison and Prime Minister (Narendra) Modi agreed on June 4, 2020, and which I progressed with my counterpart, Minister of External Affairs S Jaishankar, this month when we met in Tokyo," she said.

"It will bolster the ability of India, Australia, Japan and the United States to work together to uphold peace and stability across our region," Payne asserted.

Participation in the naval exercise demonstrates Australia's enduring commitment to enhancing regional security, stability and prosperity in the Indo-Pacific, and increasing the capability and inter-operability of the ADF, she said.

Australia last participated in Exercise MALABAR in 2007.