CANBERRA - New Zealand and Australian defence chiefs will soon begin discussions on setting up a joint Anzac rapid-response force.

The shape, size and operations of the proposed force - disclosed by the Herald in May - have yet to be considered, but Prime Minister John Key and his Australian counterpart, Kevin Rudd, believe the close ties between the two defence forces should be formalised in a new transtasman unit.

They said after meeting in Canberra yesterday that it should build on historic Anzac traditions and years of close co-operation over operations and equipment.

The potential is being explored in New Zealand's defence review, and was raised in the Australian defence white paper released this year.

New Zealand and Australian forces exchange staff and exercise frequently together, have close policy, planning and operational links and have worked together in East Timor, the Solomon Islands and Tonga.

Mr Rudd said there would be defence and security scenarios in the future where it would make a lot of sense for the two countries to be able to send a force quickly and jointly.

"This is something which I think is near and dear to [Mr Key's] heart and mine, which is how do we form an Anzac contingent which we might be able to commonly deploy to various security environments," he said.

"Our respective chiefs of defence force will be now working on the detail of that, to work out possibilities for the long-term future.

"We believe that, given the enormous bonds which exist between our two armed forces, their common training, doctrine and the compatibility of so much of their equipment, this is a useful thing for us to do together."

Mr Rudd said that initially, the proposal would only be explored, and its operational scope would be "properly crafted" by defence force chiefs.

"But I think it's a reflection of the fact that we can comfortably discuss these things in public in a way which we wouldn't discuss with practically any other countries around the world."

Mr Key said the proposal was an exciting opportunity.

"It could be a long-term relationship and one that builds up great camaraderie between the two defence forces."