Both said they were also committed to concluding a free trade deal this year.
Mr Widodo, on his first visit to Australia as head of state, said he was confident that a free trade deal would be finalised this year.
"Earlier this month, Indonesia`s military chief said Australia had apologised over the training materials used at an army base in Perth.
"President Widodo and I have agreed to full restoration of defence co-operation, training exchanges and activities," Mr Turnbull told a news conference.
Image copyright Reuters Image caption President Widodo, left, and Mr Turnbull say a free trade deal will be finalised this yearAustralia and Indonesia have restored full military ties less than two months after Indonesia suspended co-operation over "offensive" teaching material found at an Australian base.
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