The treaty means Papua New Guinea joins the United States and New Zealand as the third defence ally of Australia, and the newest addition in 70 years.
The signing followed a botched attempt in Port Moresby in September, when the trans-Torres treaty was hoped to be confirmed alongside PNG celebrating its 50th anniversary of independence.
The treaty couldn't get the green light from Mr Marape's cabinet in time, delaying the announcement and moving it to Australia.
"We are mates, we are friends, we are neighbours and today we're allies," Mr Albanese told reporters in Canberra alongside Mr Marape following the signing.
"This alliance of equals reflects our common commitment to a more secure and stable region."
The deal follows the Albanese government's $600 million decade-long commitment to fund an NRL team in Port Moresby, and was signed the day after both leaders attended the NRL grand final.
The alliance paves the way for Papua New Guineans to serve in the Australian Defence Force, with Mr Marape saying up to 10,000 citizens could serve south of the Torres Strait. Australians will also be able to serve in PNG's military.
The treaty commits each nation to support the other "in times of crisis or conflict" and mutually respond to such threats.
It also needs to be ratified by both parliaments.
While the Australian opposition backs the agreement, cross-parliament support appears less forthcoming in Port Moresby.
PNG Opposition Leader Douglas Tomuriesa has raised concerns about the treaty's impact on his nation's sovereignty and called for its cancellation.
Australia was "more worried about protecting themselves" and accused Australia of wanting to see PNG "belittled", Mr Tomuriesa told the ABC.
Mr Marape said he was confident the treaty would survive generations as it was in the best interest of both nations.
His parliament would have the chance to scrutinise the pact during its ratification, he added.
"Parliament will have full disclosure and the opposition leader is most welcome to comment on these matters," he said.
Mr Albanese said the treaty lifted the relationship to the next level when asked about the opposition leader's concerns.
"We will be transparent, both of our parliaments will go through the processes which are there, but this has been done in a very orderly way," he said.
"This will be looked at as something that was very much in the interests of both of our nations and in the interest of the region."
The PNG leader also dismissed concerns about his nation being dragged into a regional conflict if Australia went to war.
Neither nation sought war but PNG's geography meant it was intertwined with Australia's future, Mr Marape said.
"We advocate for peace in the first instance, in all instances, but as leaders you have to be also thinking about the worst-case scenario," Mr Marape said.
"You look at 1945, PNG was, by the construct of our geography, unfortunately dragged into it," he said in reference to the Second World War.
While previous agreements between Australia and PNG have locked China out of the defence and security spaces, the Pukpuk pact reaffirms "third parties shall not compromise the purposes of this treaty".
Mr Marape denied the treaty was born out of a geopolitical struggle with China in the Pacific, and said Port Moresby maintained its premier foreign policy of "friends to all, enemies to none".
"This is not a treaty that sets up enemies but consolidates friendships," he said, adding Beijing understood Australia remained PNG's primary security partner.
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