The countries' foreign ministers signed two agreements containing assurances that China will not build bombs with uranium from Australia, which has 40 percent of the world's known deposits. No official estimates were available Monday but the deal is expected to generate billions of dollars in annual sales.

"These agreements establish strict safeguards, arrangements and conditions to ensure Australian uranium supplied to China, and any collaborative programs in applications of nuclear technology, is used exclusively for peaceful purposes," said Australian Foreign Minister Alexander Downer, who signed the Nuclear Transfer Agreement and Nuclear Cooperation Agreement with his Chinese counterpart, Li Zhaoxing.

China is Australia's third-largest trading partner, with trade worth about $21.4 billion a year, supplying the communist nation with key resources such as iron ore and coal that are fueling its rapid industrial expansion.

The Australian Conservation Foundation, a leading environmental group, warned that the deal would jeopardize international nuclear safeguards by allowing China to divert uranium to its weapons program.

But Downer dismissed that argument.

"China has a nuclear weapons program whether we like it or not," Downer told Australian Broadcasting Corp. radio Monday. "It's not going to make the slightest difference whether we have this agreement with China or whether we don't to their nuclear weapons program."

The signing came on the third day of a visit to Australia by Chinese Premier Wen Jiabao, the first by a Chinese premier in 18 years.

Wen held talks early Monday in Canberra with Prime Minister John Howard, who paid tribute to the two countries' relations.

"Of all the important relationships that Australia has with other countries, none has been more greatly transformed over the last 10 years than our relationship with China," Howard said after the talks.

Australian uranium is unlikely to head to China until at least 2010, Resources and Industry Minister Ian Macfarlane said.

Wen, who had said he aimed to use his visit to accelerate the pace of free trade agreement talks initiated year ago, said Monday that China and Australia would work hard to strike a deal within the next two years.

Trade Minister Mark Vaile said he welcomed the target. Neither Canberra nor Beijing had previously set a timeframe for completing negotiations.

"I am very encouraged by Premier Wen's comments today relating to ambitious timeframes," Vaile said in a statement.