U.S. President Barack Obama and Prime Minister Julia Gillard are expected to announce a bilateral agreement expanding the military relations and cooperation of the two countries when the American leader visits on Thursday.

The agreement provides for increased naval operations of the U.S. off the coast of Australia, the stationing of more U.S. troops in the American base in Darwin, deployment of military equipment and more war games. There are currently around 4,500 U.S. troops stationed at the Robertson Barracks near Darwin.

Maj. Gen. Tim McOwan, the Australian defense attaché in Washington, said the expanded U.S. military presence in Australia is to demonstrate Washington's commitment to the security of the region amidst the increasing military presence and influence of China, according to the Wall Street Journal.

U.S. Defense Secretary Leon Panetta was in Australia in September to tell his counterpart, Australian Defence Minister Stephen Smith, that the enhanced military cooperation would counter future "threats and challenges" to the two countries and the entire region.

Obama's visit also coincides with the 60th anniversary of the signing of the ANZUS treaty by the two countries and New Zealand. The treaty provides for the security alliance of the three countries.

The U.S. leader will speak before the Australian parliament and will visit American troops in Darwin.