The one-page agreement is due to be ratified by Ms Bishop and Indonesian Foreign Minister Marty Natalegawa, in the presence of President Susilo Bambang Yudhoyono, by the end of the month.

Jakarta was enraged after whistleblower Edward Snowden released documents last November that showed Australian spies tried to tap the phones of the Indonesian President and his wife in 2009 under the Rudd government.

Indonesia recalled its ambassador to Australia and suspended co-operation in three key areas.

Ms Bishop told Fairfax Media on Tuesday the agreement was a "concise statement of our commitment to respect each other's sovereignty, pursuant with the Lombok treaty and not to harm each others interests".

Asked if the agreement meant Australia would no longer spy on Indonesia, Ms Bishop said:  "This means we will not be using our intelligence resources to harm Indonesia's  interests."

"We are working very closely with Indonesia in the intelligence sphere on common security risks including foreign fighters, so our intelligence community are in close co-operation.

"We expect that there will be a resumption of the three areas of activity that President Yudhoyono nominated as being in abeyance. Pending agreement full defence co-operation, full co-operation on border security and on intelligence  co-operation . . . there has been a level of co-operation in all of those areas but this will restore full co-ordination."

The code of conduct to limit spying between Australia and Indonesia was "a rather simple document, straight to the essence" a spokesman for President Yudhoyono told Fairfax Media.

Spokesman Teuku Faizasyah agreed the deal would need to be signed off soon, as Dr Yudhoyono, who was travelling for much of the rest of the month, wanted it signed by the end of August.

A spokesman for Dr Natalegawa declined to reveal the wording of the document, but said it would be publicly released at the time of signing.

''It covers the core areas of what has been the issue between Indonesia and Australia,'' said spokesman Michael Tene.

He confirmed that normal co-operation between the two countries on defence, intelligence and people smuggling could resume as soon as the agreement was inked.

The original ''six-point road map'' for resuming relations, laid down by Dr Yudhoyono last December, contained strictures that, after the signing, the Indonesian government would test to make sure that Australia was complying before it resumed full co-operation.

But Mr Tene said that monitoring had been ''already ongoing''.

''We hope that [relations can resume] as soon as the agreement is signed. This is in the interests of both countries.''

The signing will fulfil the one of the preconditions for defence, intelligence and people smuggling co-operation to resume after they were suspended nine months ago in the wake of revelations that Australia spied on the president, his wife and inner circle.

Mr Faizasyah confirmed the agreement had been "basically finalised" and now it was "only a matter of finding a time to sign it".

While he had not seen the final text, he said: "I think it is something that's very focused on the issues . . . a very short, neat document".

It will stand as an addendum to the Lombok Treaty, signed by Dr Yudhoyono and then prime minister John Howard in 2006 after the last breakdown in relations over a group of refugees from West Papua. Ironically, Dr Yudhoyono will be travelling later this week to West Papua.

During his last meeting with Dr Yudhoyono in Indonesia in June, Mr Abbott said the two countries needed to actually step up intelligence sharing, saying the challenges ahead – including jihadists returning from the civil war in Syria – would affect both.

The spying revelation also led to the six-month withdrawal of the Indonesian ambassador to Canberra. He returned in May.